To bring this strategy into action, managers must extensively evaluate their resource pool and competencies and leverage them to the maximum potential.

After all, the workforce is the success driver of any organization. To leverage their skills to the maximum extent, managers develop a comprehensive resource-based view strategy. It allows the seamless allocation of resources to the right job and enhances project performance and delivery. This, in turn, benefits the long-term success of the organization.

Overall, a resource-based view strategy can be the game-changer for any organization’s sustainability in a competitive market.

This blog explores the various aspects of resource-based view model and how it helps organizations gain a competitive edge.

Let’s begin with understanding the fundamentals  of resource-based strategy in detail here.

What is a resource-based view strategy (RBV)?

The resource-based view (RBV), also known as resource-based theory is a strategy which emphasises the significance of organizational resources and capabilities as the key to gaining competitive advandage and performance. A highly skilled talent pool helps an organization to explore opportunities and prevent risks in advance. It also enables them to implement strategies to improve operational efficiency and effectiveness.

It formulated by organizations to understand the elements of the business for a long-term competitive advantage. This theory emerged during the 1980s-1990s from the major works of B. Wernerfelt, Hamel, Prahalad, and others.

They stated that- ‘to have an edge over the competition, the organization should look into the potential of the company’s internal resource pool rather than seeking the external competitive environment.’

The RBV model explains that it is significant to accept and fulfil external or new opportunities using existing resources innovatively by acquiring new niche skills. As a result, the resource-based analysis should empower the workforce to achieve higher organizational prowess in the RBV framework.

Let’s now dive deep into the benefits of RBV strategy:

Importance of resource-based view strategy

The resource-based view strategy aims to gain a sustainable competitive advantage. But how can an organization achieve this advantage?

It is through extensive resource-based analysis, resource allocation, and cross-functional usage of resources. Only when a firm unleashes its workforce’s true potential can it innovate better and stand out in the industry.

Here is how a resource-based theory helps them achieve the same,

Provides visibility for efficient resource allocation

The comprehensive view of all the resource pools facilitates managers’ gaining insight into resource skills, competencies, experience, capacity, availability, etc. This, in turn, enables managers to plan ahead and allocate resources per the project’s scope, demand, and timeline. This real-time centralized information helps them make data-driven decisions, leverage talent to its optimum potential, and maximize profitability.

Facilitates strategic decision making

The resource-based theory helps managers meticulously assess resource strengths and weaknesses. This analysis empowers them to maximize the utilization of strengths while implementing measures to mitigate resource weaknesses. By leveraging strengths and strategically addressing the bottlenecks, the company can align its actions with long-term goals, gaining a competitive edge in the industry and ensuring sustained success in evolving market landscapes.

Enhances innovation & adaptability

The resource-based strategy helps foster a deep understanding of a firm’s unique resources and capabilities. It encourages leveraging these distinct strengths to drive innovation, encouraging the development of new products, services, or processes that capitalize on these resources. Additionally, RBV promotes adaptability by continuously evaluating and evolving these resources to match changing market demands, enabling firms to pivot and adjust strategies effectively based on their core competencies, thus fostering a culture of innovation and resilience.

Promotes long-term sustainability

By prioritizing the development of unique, valuable, and challenging-to-replicate resources, the resource-based strategy nurtures long-term sustainability. Further, continuous assessment, enhancement of the internal strengths establishes a resilient foundation, reducing reliance on external factors. This approach fosters adaptation to market changes, creating enduring advantages that competitors struggle to imitate. Thus, ensuring sustained success and longevity in the market.

Maintains the competitive advantage

The rise in market volatility propels extensive ad hoc project demands, which often become the deciding factor for your company’s growth and success. In these situations, resource managers can utilize both their primary and secondary workforce skills to execute critical multi-faceted projects. A Resource-based view strategy on a centralized platform enables demand fulfillment to sustain their competitive advantage.

Enables cross-functional usage of resources

In a matrix organization, the resource-based strategy model facilitates enterprise-wide visibility of the workforce and its expertise. It helps allocate appropriate resources from different departments and forms a cross-functional team to execute the project. It reduces hiring cycle costs and also helps to leverage the diversified workforce. Besides, employees are also given multi-faceted projects to enhance their professional portfolios.

Given the importance of resource-based theory, here’s a detailed description of the fundamental concepts:

Major concepts of resource-based view (RBV) analysis

RBV is a strategic theory beneficial for understanding why companies outperform other competitors. It is a commonly adopted analytical method used to determine the strengths and limitations of an organization and evaluate the firm’s workforce.

With the understanding of the resource-based strategy or RBV model, let’s emphasize the details of its different types of assets.

The assets of the RBV model

There are two types of assets in the RBV model: tangible and intangible assets.

Tangible assets

The tangible assets are the physical resources of the firm that are quantifiable. It includes products, machinery, equipment, capital, infrastructure, etc. They can be easily acquired by competitors in identical assets and offer a less competitive advantage in the long run.

Intangible assets

Intangible assets are resources that are owned by respective organizations and which do not have a physical presence. It includes brand presence, intellectual property, goodwill, trademarks, etc. Unlike tangible assets, intangible assets are built over a long time and cannot be replicated by competitors.

Invariably, intangible resources remain within a business and are the primary source of sustainable competitive advantage.

The critical assumptions of RBV

The fundamental principle of the RBV model explains competitive heterogeneity between companies. To transform a short-run competitive advantage into a sustainable one, the two critical assumptions of resource-based theory are that the resources must be heterogeneous and immobile. Let’s discuss this in detail here:

Heterogeneous

The primary heterogeneous assumption is that organizations must significantly differ in terms of resources and core competencies. If companies have the same mix of resource pool, they would not be able to employ different business strategies to outperform each other. On the other hand, when exposed to the same competitive market, companies with a heterogeneous workforce can outrank each other by implementing different strategies.

For instance, the technology giants- Apple Inc. and Samsung Electronics operate in the same industry (Smartphone and tablet market) and, therefore, are subject to the same competitive market. However, they possess disparity in organizational performance due to the difference in resources and their expertise (heterogeneous resources).

Immobile

The second assumption of resource-based theory states that the resources are immobile and thus do not move freely from one company to another (employee movement), at least in the short run. Due to this immobility, competing firms could not replicate their resources’ expertise and implement an appropriate strategy.

Immobile resources include all the intangible assets of a company, such as brand equity, intellectual property, etc., and some of the tangible assets.

However, a firm’s sources of competitive advantage go beyond heterogeneity and immobility. Other factors play a vital role in enabling firms to stay competitive. Here is an in-depth explanation:

What is the VRIO framework?

Adding on to the assumptions, a renowned professor of strategic management, Jay B Barney, introduced a VRIN structure in 1991 that was later altered by other leading thinkers. The new VRIO Framework is an improvement of the VRIN model and was adapted from Rothaermal’s ‘strategic management’ (2013).

The VRIO framework is a tool used within the Resource-Based View (RBV) to assess whether a company’s resources and capabilities can contribute to sustainable competitive advantages. The VRIO analysis categorizes the resources based on their Value, Rarity, Imitability, and Organizational system.

Let’s understand each of these attributes in detail:

Value: It states that resources are only valuable to organizations if they contribute to their goal in terms of products or services. Besides transforming inputs into outputs, value addition occurs when your resources successfully exploit profitable ventures or bring down external costs, thereby, increasing revenue. The resources that cannot acheive this condition lead to competitive disadvantage.

Rarity: The tangible and intangible resources that very few organizations can only acquire are rare resources. A firm with these rare skill sets in its closet can reap the competitive benefits and stand out in the market. In contrast, companies that possess the same set of resources and capabilities face competitive parity.

Imitability: The key to competitive sustainability is the decrease in the rare or valuable resources’ imitability rate for the long term. It can only be achieved when the compensation is higher than the cost offered by other companies to mimic these resources and capabilities.

Organization: For a resource to exhibit competitive advantage, the organization, its processes, and systems must be designed in a way that supports a resource for maximum productivity. It includes having the right resource management system to ensure all the critical resource KPIs are optimized and balanced.

What is an example of VRIO framework?

Let’s consider the following scenario to understand the VRIO framework:

An IT organization wants to assess its competitive advantage in the market. They conduct a VRIO analysis to evaluate their internal resources and capabilities.

First, they look at their human resources.

The organization has a team of highly skilled software engineers and cybersecurity experts who possess deep expertise in cutting-edge technologies. This expertise is valuable as it allows them to develop innovative software solutions and provide robust security measures. It is also rare because finding individuals with such specialized knowledge and experience is challenging.

Furthermore, the company has invested significantly in training and developing its employees, making it difficult for competitors to replicate this resource. Overall, the human resources of the IT organization possess a valuable, rare, and difficult-to-imitate advantage.

Next, they assess their tangible resources. The IT organization owns a state-of-the-art data center with advanced server infrastructure and networking equipment. This physical infrastructure is a valuable asset as it enables the organization to deliver reliable and scalable IT services to clients.

However, it is not a rare resource since other IT companies can invest in similar equipment. While it may be difficult to imitate the exact setup of the organization’s data center, the resource does not provide a sustained competitive advantage.

Moving on to organizational capabilities, the firm has a well-established project management framework that ensures efficient project execution. They have a streamlined process for requirements gathering, development, and deployment, enabling them to deliver projects on time and within budget. This capability is valuable as it gives them a competitive edge in terms of project delivery and customer satisfaction.

However, it is not rare, as other IT companies also implement project management methodologies. Therefore, while valuable, the organizational capabilities of the IT organization do not provide a sustained competitive advantage.

Finally, they analyze their intangible resources. The IT organization holds several software patents related to their proprietary solutions, protecting their intellectual property and providing legal barriers to entry for competitors. These patents are a valuable and rare resource, granting the organization exclusive rights to their innovations. It is also difficult to imitate, as competitors must develop unique solutions to bypass the organization’s patents. This gives the IT organization a sustained competitive advantage in the market.

In conclusion, the VRIO analysis indicates that the IT organization’s human resources and intangible assets (patents) provide valuable, rare, and difficult-to-imitate advantages, thus contributing to their competitive advantage in the IT industry.

However, while valuable, their physical resources and organizational capabilities do not offer sustained competitive advantages. This resource-based analysis helps the organization identify areas where they can leverage their strengths and prioritize their talent to maintain their market position and continue delivering innovative IT solutions to clients.

Formulating the VRIO Framework is only half the battle won. It is also essential to develop and implement a resource-based strategy that suits organizational needs. But first, let’s understand the limitations of the RBV strategy.

Limitations and challenges of resource-based view (RBV) strategy

While the Resource-Based View (RBV) strategy offers valuable insights into developing competitive advantages, it is essential to recognize the challenges and potential limitations associated with its implementation. Understanding these limitations can help businesses make informed decisions and mitigate potential pitfalls.

Difficulty in identifying and evaluating resources

One of the key challenges in RBV is accurately identifying and evaluating firm resources. It can be complex to identify all the resources that contribute to a firm’s competitive advantage, particularly intangible resources such as knowledge, culture, and relationships. Furthermore, assessing the value, rarity, inimitability, and substitutability of resources (VRIS framework) can be subjective and influenced by contextual factors, making it challenging to derive precise conclusions.

Resource mobility and imitation

RBV assumes that resources and capabilities are not easily transferable or imitable by competitors. However, in a rapidly changing business landscape, technological advancements and market dynamics can reduce the durability of resource advantages. Competitors may quickly identify and replicate successful resource configurations, diminishing the uniqueness and advantage of a firm’s resources. Continuous innovation and protection of valuable resources are essential to maintain a sustainable competitive advantage.

Dynamic environment and adaptability

RBV acknowledges the importance of dynamic capabilities to respond to environmental changes. However, adapting organizational resources and capabilities to evolving market conditions can be a complex and resource-intensive process. Companies must be agile and proactive in identifying emerging trends, customer needs, and technological advancements. Failure to adapt and update resources and capabilities can lead to obsolescence and loss of competitive advantage.

Resource-related constraints

RBV assumes that firms have access to diverse tangible and intangible resources to build competitive advantages. However, in reality, organizations may face resource limitations, such as financial constraints, scarcity of talent, or limited access to key inputs. These constraints can restrict the development and acquisition of resources and hinder the implementation of RBV strategies.

Overemphasis on internal factors

RBV’s focus on internal capabilities may lead to a limited consideration of external factors, such as market trends, competitive forces, and customer preferences. Ignoring these external influences can result in a myopic view and missed opportunities. Businesses should strike a balance between leveraging internal strengths and adapting to external market dynamics to achieve sustained competitive advantage.

Lack of prescription and implementation guidance

RBV does not provide a step-by-step guide or a standardized framework for implementation. The resource-based strategy is more theoretical and conceptual, making it challenging for organizations to translate it into actionable plans. Firms need to develop their own approaches and tailor RBV principles to their specific contexts, which requires careful resource-based analysis and strategic decision-making.

By being aware of these potential drawbacks, businesses can leverage the strengths of RBV while considering complementary strategies and frameworks to address the limitations and create a holistic approach to sustaining competitive advantage.

Now, here is some information to create a strategy that sustains the competitive advantage in the long run.

How to develop a full-proof resource based view RBV strategy?

The scope of strategy integration in the current business functions results in a competitive advantage. Managers should develop a plan in the RBV-centered organization to leverage internal resources to external opportunities and competition.

Here are the different steps to develop a strategy when utilizing a resource-based view of the organization:

Identify key resources and competencies

Identifying essential resources and skill sets is the first step toward forming an effective RBV strategy for the organization. The resource management tool facilitates the 360-degree visibility of all tangible and intangible resources like- workforce, technology, patents, equipment, machinery, etc., and their attributes across the enterprise.

This helps managers identify critical resources based on the project’s demand at the right time and cost. Further, identifying key resources also enables firms to develop core competencies that create barriers to imitation, thus strengthing their position in the market.

Analyze the industry to understand rarity of your resources

To gauge the rarity of resources within an industry, conducting a comprehensive industry analysis is crucial. This entails assessing the business landscape, understanding the emerging market trends, and evaluating the availability of similar resources competitors possess.

As a result, firms can identify the resource scarcity or rarity and determine the aspects that will provide a competitive edge in the industry. For example, if a technology or a niche skill set is rare within the industry, it becomes a valuable asset for the company. Also, analyzing the industry allows a deeper understanding of how the firm’s resources stand out within the industry and contribute to a sustainable competitive advantage (SCA).

Determine the barriers impeding competitors from replicating your resources

Identifying and reinforcing the barriers that hinder competitors from replicating your resources is crucial for deterring imitation and surpassing competition. To achieve this, managers must conduct a thorough resource-based analysis of the workforce’s skills, knowledge, and processes, as well as existing strategic partnerships.

Further, firms can impede replication by creating exclusive contracts, securing patents, offering competitive salaries, etc. Moreover, continuous investment in research and development, coupled with a robust organizational culture, contributes to resource complexity. This makes it challenging for competitors to replicate the resources, thus fostering a competitive edge.

Assess your organization’s ability to utilize the resources

Evaluating a firm’s capability to leverage its resources is integral to the Resource-Based View (RBV) strategy. Firstly, it involves an in-depth evaluation of available resources—both tangible and intangible. It helps the firm understand its strengths and weaknesses in comparison to competitors. Subsequently, this resource-based analysis can help firms strategize on how to allocate these resources efficiently by leveraging strengths while mitigating weaknesses.

Furthermore, another critical aspect of assessing an organization is how well the managers are able to optimally utilize their resources. This is because underutilization of resources can cause low morale, disengagement, etc., and overutilization can lead to burnout, stress, and lower productivity. Thus, firms must efficiently utilize their resources to enhance their billability and increase profitability and brand reputation in the market.

Apply the VRIO framework to each resource

Next, managers must apply the VRIO framework to each tangible and intangible resource to assess their Value, Rarity, Imitability, and Organization aspects. This helps determine the firm’s competitive advantage in the industry. For instance, a specialized patented technology might offer high value by enhancing product performance (V), but if it’s a standard technology in the industry, its rarity might be low (R).

Moreover, if competitors can easily replicate or substitute it, the resource might lack inimitability (I). However, if the company effectively organizes and utilizes this technology uniquely, it could potentially have a sustained edge in the market (O). Thus, applying this framework helps firms identify the resources’ strengths and weaknesses and accordingly make decisions to shape their strategic vision.

Address any weaknesses identified in the VRIO analysis

After performing the VRIO analysis, managers must implement strategic measures to mitigate any weaknesses identified within the workforce to ensure its distinctiveness in the industry. For instance, if a resource lacks ‘value’ or is not rare, managers must put dedicated efforts towards its enhancement to ensure its uniqueness or utility.

Additionally, when a resource is easily imitable, or the organization fails to maximize its potential, strategic adjustments such as innovation, legal protection, or firm restructuring may become required. Thus, addressing these deficiencies allows businesses to refine the resources and align their skills to strategic goals.

Allocate competent workforce to projects

After effectively addressing and mitigating weaknesses identified through the VRIO analysis, managers must skillfully allocate competent resources to suitable projects. This is achieved by gaining centralized visibility and real-time insights into resource attributes, such as skill sets, location, charge-out rate, etc.

For instance, consider a firm is expanding its operations beyond existing geographical boundaries. In this case, it would be prudent to consider allocating competent, low-cost global resources to new projects. This streamlines resource allocation and improves operational efficiency, contributing to the firm’s financial success.

Leverage resources for multiple projects

Deploying resources to varied projects facilitates the shared service model in a matrix organization. This strategic approach empowers managers to efficiently leverage existing assets, skills, and capabilities to support various project initiatives. To achieve this, managers must establish clear project priorities, maintain cross-functional teams, etc.

Further, through meticulous resource planning and allocation, firms can ensure that resources are shared or utilized to their full potential without compromising the success of individual projects. Thus, by embracing these measures, organizations can enhance productivity, minimize redundancies, and effectively support multiple projects simultaneously.

Implement succession planning for niche skills

Resource managers play a critical role in safeguarding project delivery against unforeseen challenges, like the sudden resignation of critical or niche-skilled resources. To proactively mitigate these risks, it is essential to establish a comprehensive succession planning and backup strategy.

By creating a contingency plan that incorporates targeted training and development opportunities like shadowing or knowledge transfer measures, organizations can effectively cultivate as well as transfer specialized skill sets to appropriate resources. This helps minimize disruptions and uphold project continuity even in the face of unexpected resource bottlenecks.

Conduct regular training to upskill the resource pool

To diversify the workforce’s professional spectrum and provide a competitive advantage, building upon resources’ skills and expertise is imperative. By investing in multi-skill building practices such as IDP, on-the-job training, workshops, etc., managers can help foster a culture of continuous learning.

This sustained commitment to regular training and upskilling keeps the workforce dynamic, which allows them to work on diverse projects. Additionally, it cultivates a proactive and adaptable environment, ensuring that the workforce remains ahead of industry trends and challenges, positioning itself for success in the ever-evolving business landscape.

Conclusion

Competition is a fundamental aspect of business and innovation. Resources are the force that steers you through this competition. Therefore, utilizing the resources to their maximum potential is the key to maintaining and sustaining the competitive advantage.

A resource-based strategy ensures optimal performance of resources and organization both!

The best practices mentioned above will help formulate a full-proof RBV strategy for competitive advantage to enhance business sustainability and profitability. The new framework will also help firms conduct resource-based analysis to identify discrepancies in the current functional system, giving scope for continuous improvements.

How often do you look at your resource pool? Does your workforce have the four VRIO qualities as articulated by resource-based theory?

The Glossary

The SAVIOM solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them to achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software, which can be easily customized as per business requirements.

Many organizations do not have a dedicated resource capacity planning tool. They have been carrying out the resource allocation and capacity planning process using their legacy systems, such as Excel spreadsheets/other home-grown applications. There are many resources, and no mechanism exists to link their work together to get enterprise-wide visibility for resources.

The Excel spreadsheets and half-baked home-grown capacity planning solutions are incredibly limiting, time-consuming, and hard to maintain. In fact, “88% of spreadsheets are difficult to maintain.” It cannot meet new business challenges.

Businesses are in desperate need of an enterprise-level futuristic resource capacity planning solution. This guide has been designed for businesses to understand enterprise resource demand and capacity planning in project management. In addition, it will help any company to establish the right processes with the tool.

But before delving into the details, let’s first understand the capacity planning definition.

What is resource capacity planning?

Resource capacity planning predicts the gap between future demand and workforce capacity to identify the shortfall/excesses of resources. Accordingly, one can develop a resource capacity plan to bridge the gap proactively for successful project delivery while ensuring every resource is optimally utilized. Thus, it becomes an essential step before resource allocation, providing all available resources before the project’s onset.

The resource capacity planning process requires centralizing information from various systems. These systems are human resources, skills, current projects, future pipeline projects, resource demand/ allocation, vacations, and non-project activities. It helps you build a single real-time system as a single source of truth.

Role of resource capacity planning in project management

The resource capacity planning model plays a vital role in project management. It helps align sales and delivery by planning and forecasting pipeline opportunities. Once a pipeline project reaches a certain probability stage, the manager estimates the resource requirements and initiates the requisition process.

The corresponding resource manager then starts planning for fulfillment. But first, they need to analyze if there are sufficient resources to start the project.

The resource manager compares the existing resource capacity against the project demand from multiple perspectives such as role, department, team, skills, etc.

It helps to identify the shortages or excesses ahead of time. Accordingly, managers can apply appropriate resourcing strategies, such as hiring a permanent or contingent workforce, to bridge this gap.

Allowing sufficient lead time helps avoid last-minute hiring/firing costs and ensures that the right resources are available for projects at the right time and cost. Simultaneously, capacity resource planning helps minimize bench time proactively by facilitating on-the-job training, adjusting timelines, or selling excess capacity.

In a nutshell, resource or workforce capacity-based planning helps build an optimized project team, reduces project costs, and future-proofs the workforce against market volatilities and economic uncertainties.

What are the key elements of resource capacity planning?

Resource capacity planning involves determining and managing the availability and capacity of resources required for project execution. It ensures appropriate resources are allocated to tasks and projects based on availability and workload capacity. The key elements of resource capacity planning include:

Identifying and categorizing resources

Managers must have complete data on the available resources in the workplace. For this, they should first establish specific categorization criteria, such as role, skills, expertise, availability, cost, etc. Following that, they can then use these criteria to group their available talent pool into different resource categories required for various project activities. This category-based grouping provides an overview of the resources at the organization’s disposal, helps assess the resource capacity, determine bottlenecks, and evaluate gaps.

Estimating resource demand

Organizations must accurately forecast and estimate the resource demand to ensure successful completion of projects. To achieve this, they must evaluate project plans, scope, and timelines to determine the specific resources required for each project activity.These resources include skills and expertise, materials, equipment, etc. In addition, they must also identify the total resources or capacity required to complete the project on time. By thoroughly assessing these factors, organizations can align their resource allocation strategies effectively and optimize the utilization of available resources.

Assessing the resource capacity

Assessing resource capacity is a critical element of resource capacity planning, which involves evaluating the organization’s ability to meet demands and requirements for resources within a specified period. Here, once project managers determine the resource demand, managers analyze the existing workforce using availability or capacity vs. Demand reports. This step helps understand whether the organization has the right number of resources with the desired skills to meet ongoing and future demands.

Capacity vs. demand gap analysis

A capacity vs demand gap analysis is key to identifying the gaps between the resources needed for future projects and the ones available within an organization. This step is vital as it helps managers check for any imbalances in capacity and demand. It involves comparing the future resource demand with the available capacity to identify shortfalls or excesses. If there are any potential gaps, managers can take corrective measures to bridge them to ensure uninterrupted project execution and improve overall billability.

Now that we know the various components, let’s understand the importance of capacity planning for firms.

What are the business benefits of resource capacity planning?

Resource capacity planning helps businesses plan pipeline projects and futureproof the workforce against ongoing market volatility. Here are some of the advantages of resource capacity planning for your business:

Reduces project resource costs across the enterprise

Capacity planning helps forecast the skill demand precisely and arrange the requisite personnel. It:

• Reduces last-minute expensive hiring measures to fulfill sudden demands
• Helps avoid unnecessary overhead costs and frequent hiring/firing cycles.
• Allows for the allocation of resources to tasks based on the available capacity, preventing double booking, burnout, and unplanned attrition.
• Eliminates under/over-skilled resources on projects
• Utilizes cost-effective global resources without compromising quality
• Minimizes hiring/firing cycles by aligning project workload with workforce capacity
• Avoids double booking of resources and minimize burn rate
• Controls unplanned attrition of resources

Maximizes productive utilization of every resource

Billable resource utilization is a critical KPI for a professional service business to ensure profitability and sustainability. Capacity planning helps balance the availability of resources with the project demand to prevent under/overallocation to minimize idle time, billing losses, and work overload.

Additionally, it allows for forecasting billable and strategic utilization of the workforce ahead of time. Based on that, managers can mobilize employees from non-billable or low-priority work to billable or high-priority projects to tap into their maximum potential and enhance profitability.

Ensures competent resource allocation for successful project execution

Having the right-skilled employees available at the right costs is crucial for a project to finish within the budgeted time and cost. Capacity planning enables resource planning and management to identify and allocate competent resources to each project based on their skills, experience, qualifications, location, team, resource cost rate, and other defined criteria.

It, thus, helps implement the “best-visible-best-fit” instead of the “first-visible-first-fit” approach to distribute tasks evenly based on resources’ ability and capacity. It, therefore, prevents work overload, schedule overruns, and contributes to timely project completion.

Forecasts and bridges the skills gap

Capacity planning helps identify skill shortages or excess ahead of time and take several corrective actions to eliminate them. For example, managers can:

• Readjust project start and end dates to align with the available capacity.
• Hire a contingent workforce for short-term requirements
• Retrain and upskill employees to prepare them for future projects.
• Bring forward some initiatives to meet strategic goals in case resources are in excess to optimize bench size.
• Mobilize resources across several departments to maximize utilization and increase profitability.

Aligns sales and delivery by forecasting pipeline opportunities

Capacity planning helps consider the forecasted and actual deals a company wins to estimate the resources ahead of time. It also allows the delivery team to coordinate with the sales team to evaluate and determine the feasibility of the sales pipeline opportunities based on the project’s resource requirements and the client’s expectations.

Accordingly, the delivery team can forward-plan and ensure the right resources are available at the right time to finish the project. It also helps prevent the ‘overcommit and underdeliver’ trap often arising from sales-delivery misalignment to ensure timely project initiation and enhance client satisfaction.

Once the benefits of resource capacity planning are clear, let’s move on to learn some of the best methods of resource capacity planning.

Best practices of resource capacity planning

Resource capacity planning in project management is becoming increasingly critical for a business to reduce resourcing costs and become responsive to the market. As a result, resource capacity planning has gone beyond the basics of measuring workforce demand against capacity.

Here are some key strategies to implement capacity planning efficiently in your firm

Forecast capacity vs. demand and form a project resource plan in advance

A business must forecast capacity vs. demand from multiple dimensions, i.e., by role, department, team, location, skills, etc. It helps identify short- or long-term shortages/excess of resources. This enables the managers to implement the right resourcing treatments to bridge the gap.

For instance, in case of shortages, organizations can facilitate re-training/upskilling resources, or hiring a permanent/contingent workforce to avoid last-minute hiring/firing costs. Conversely, when the resources are in excess, managers can either bring forward project timeline or sell extra capacity to optimize resource utilization and ensure successful project delivery.

Track and analyze the competency matrix in real-time

Tracking and keeping up-to-date information about the workforce competencies and skills is critical. It allows the right resource with skill, experience, qualifications, individual preferences, etc., to be allocated to the proper work.

It helps plan a new project that may need a niche skill that is difficult to get from the market. If such a capability is available within the organization, the resource can be outrotated with a suitable backfill candidate. It, thus, helps initiate the new high-priority project on time without disrupting the ongoing one.

Manage project pipeline efficiently

The system should keep track of future potential projects in the pipeline and forecast estimated resource demand. It will ensure the resource pool is optimally balanced, skilled, and ready to meet the demands of new projects.

Managers can decide whether to re-skill, hire, or have contingency resources to do the work. They can also assess the pipeline project demands to determine whether they are one-off or recurring to create an optimal mix of permanent and contingent resources and overcome budget constraints.

Predict and improve overall resource utilization

The system should provide short- or long-term billable, strategic, and overall utilization forecasting. If resources are underutilized, managers can bring forward some project timelines or sell excess capacity to optimize their utilization.

If resources are overutilized, they can adjust projects’ timelines to match the future availability, pull in additional team members, or initiate a planned or project-specific hiring as required. This way, managers can take proactive measures to ensure optimal utilization levels of the workforce.

Foresee project vacancies and people on the bench

Failure to find the right resources for the right project can cause you to lose an opportunity. Therefore, the system should give you foresight into future resource needs and people who will end up on the bench.

It helps resource managers mix and match available people against project vacancies to avoid increased idle time and billing losses as repercussions. Not just that, robust capacity planning measures also help ensure all the projects are staffed with the right-skilled resources and ensure their successful execution.

Streamline resource requisition to deliver projects on time

Conventionally, resource requisition and allocations are done through email or phone requests that cause chaos. The reason is that it leads to silos of information regarding resource requests and allocations across various projects. Therefore, a resource may be booked for multiple projects beyond their capacity.

It can cause not only burnout but also power conflicts among project managers for similar-skilled resources. Therefore, streamlining the process using workflow is critical to ensure resources are allocated with appropriate approvals and notifications. In addition, one must avoid unnecessary emails/telephone calls as they cannot be easily reconciled, documented, and analyzed later.

These are some effective strategies businesses can adopt for resource capacity planning. Let’s look into the effect of resource capacity planning on utilization.

How does resource capacity planning affect utilization?

Achieving high utilization rates relies on the efficient movement of team members across tasks and projects, minimizing unnecessary downtime. Successful resource capacity planning is vital in aligning resources, their skills, and project demands. By implementing effective resource capacity planning, companies can experience increased utilization rates that remain strong over time.

Additionally, it is also crucial to continually implement capacity planning strategies, learn from past projects, and build a comprehensive catalog of employee skills. This continuous improvement approach enhances planning and resource allocation, resulting in a positive impact on utilization rates. Ultimately, the goal is to reach a utilization percentage that maintains profitability while avoiding employee burnout.

Knowing how resource capacity planning impacts utilization, let’s understand how to select the right solution for effective capacity planning.

How to choose the right solution for efficient resource capacity planning?

Capacity and resource planning is a crucial part of the performance improvement of modern business. It is critical to look for a solution beyond the current spreadsheet functionalities. A business should ensure that they have robust capacity planning software that can provide the following:

The system should be scalable, configurable, and expandable

Every business is different, and so are its workforce capacity planning needs. Therefore, a business must select a scalable and configurable capacity planning tool to meet current needs and expandable to meet future business requirements. In addition, system performance must not degrade with more users using the device across the organization.

It should forecast profitability and productivity

Resource capacity planning methodology should help your business to do multi-dimensional forecasting. It will provide real-time business intelligence to improve business performance, profitability, and productivity.

It must solve the complexities of matrix organization

It must align with the matrix organization structure. Nowadays, most businesses have established a matrix organization structure to best utilize their resources. So, companies must have a capacity planning tool that aligns with matrix organization structure and associated complexities.

The solution must provide real-time BI analytics

Project demand in a real-life business environment changes every minute. So, it is crucial for resource management and capacity planning techniques to get real-time business intelligence, i.e., reports, analytics, and dashboards.

It should integrate with other applications

Most businesses have already invested in enterprise-level systems. They hold a lot of data required by a capacity planning solution, i.e., resource profile, competencies, project detail, etc. So, the resource management system must integrate seamlessly with existing applications.

In this way, organizations can choose the right capacity planning solution. So now, let’s know some ways to do resource capacity planning.

Checklist for resource capacity planning for a specific period

Here are some critical capacity planning strategies you must consider while managing capacity and demand for projects.

Forecast & calculate workforce capacity

• Take an inventory of your organization’s full-time, part-time, contractor, or freelance resources.
• Include resources who will be joining or leaving during this period
• Assign calendar (Workweek and Holiday list) to your resources if they are working at different locations
• Track the skills and competencies of the selected resources

Establish project portfolio

• List all the current and future projects
• List all the potential opportunities which are in the pipeline
• Account for non-project activities like BAU, Support Maintenance, Administrative Work, Training, etc.
• Categorize the projects into Billable, Strategic, and Non-Billable Projects
• Prioritize your projects for a better Capacity Planning process

Forecast resource demand

• Get foresight into the resource requirements of the pipeline projects
• Identify the competent resources and their availability during the same timeline
• Prioritize the demand as per the criticality of each project and their subsequent tasks

Compare resource demand against capacity

• Analyze Resource Capacity versus Demand
• Identify the Gap between Resource Capacity and Demand
• Identify skill shortages or excesses, if any.
• Plan on how to bridge the gap of shortfall of resources ahead of time

Allocate resources to the appropriate projects

• Assign the right resources to the right Project. Avoid allocating over-skilled or under-skilled resources
• Allocate generic resources or placeholders on future Projects
• Create estimates using placeholders for your Opportunities
• Record resources unavailable time, i.e., People going on Leave, training, etc.
• Implement the right resource optimization technique to avoid employee burnout

These are a few techniques to be considered for managing project capacity and demand.

Conclusion

Resource capacity planning is a crucial aspect of project resource management. By leveraging the functionalities of advanced capacity planning tools, businesses can use their resources more effectively. In addition, it also helps in reducing resourcing costs, eliminating reactive hiring, and futureproofing their workforce against market volatility.

Glossary

The SAVIOM solution

SAVIOM is the market leader in providing an Enterprise Resource Capacity Planning solution. With over 20 years of experience leading the market, Saviom is actively used by over 15 highly esteemed global companies worldwide. The tools within the suite include project portfolio management, professional service automation, and workforce planning software. Re-engineer operational efficiency with a system shaped around your business!

Many project-intensive businesses use either silos of spreadsheets or some home-grown tools for scheduling their resources. These solutions are incredibly limiting, time-consuming, and hard to maintain. It creates double bookings, over/underutilized resources, undesirable hiring/firing, low staff morale, improper planning of pipeline projects, etc.

To achieve your limited resources’ full potential, a business must establish an enterprise-level mature resource scheduling process.

This guide has been designed for businesses to get a comprehensive understanding of resource scheduling systems to establish the right processes with the right tool.

What is resource scheduling?

Resource scheduling is the most crucial part of the resource management process. It involves identifying and allocating resources for a specific period to various types of activities.

Resource scheduling is the process of assigning resources such as people, equipment, materials, and facilities to various tasks for a specific period. These activities can be related to project work or non-project work, i.e., BAU, Support, admin, operation, etc.

The main objective of resource scheduling is to ensure that the right resources are available at the right time to meet project deadlines and achieve business objectives.

Project managers estimate the resource requirements needed to meet the deliverables and request the same from resource managers who complete the initial allocation.

In short, resource planning and scheduling is crucial for streamlining resource and project management processes.

Types of resource scheduling methods

Below are the two main types of resource scheduling methods:

Resource-constrained scheduling

The resource-constrained scheduling method is primarily used when an organization has limited resource availability. The goal is to ensure that the project deliverables are completed efficiently without overloading existing resources. It involves adjusting the start and finish dates of tasks to ensure optimal utilization of resources throughout the project lifecycle.

For example, a software development project requires a senior programmer who is only available part-time due to other commitments. To accommodate this constraint, the project manager can alter the timeline of tasks that require the programmer’s expertise based on their availability. Thus, optimizing the project schedule based on the resource capacity ensures that the tasks are delivered as per expectations while maintaining quality.

Time-constrained scheduling

The time-constrained scheduling method is primarily used to manage resource constraints in projects with strict deadlines. In this approach, the project timeline is considered a critical factor, and the goal is to ensure that the project is completed within the specified deadline.

For example, in a construction project with a fixed completion date, the project schedule may be organized in such a way that key resources are first assigned to critical tasks. This ensures their availability and avoids scheduling conflicts. Moreover, managers can also add additional resources to keep the project schedule on track.

Now that we know the types of scheduling, let’s learn about its importance.

Importance of resource scheduling in project management

Every project is an integration of multiple tasks that require certain niche skills to produce tangible results. The onus is on project and resource managers to ensure that the right resource is working on the right task. Or else, it may deteriorate the project quality and also reduce employee productivity.

At the same time, the manager has to keep in check the availability of the workforce. For instance, if one critical resource is booked for multiple projects simultaneously, it will cause over-utilization, eventually leading to burnout.

Adding to that, if the resource’s skills do not align with the project tasks, it will compromise the project’s quality and lead to employee dissatisfaction. These factors contribute to a low resource health index.

Moreover, every project has a definite timeline, and it’s the project manager’s responsibility to ensure that the project is delivered on time and within budget. If the resources are not scheduled before the project initiates, it will result in delays in task execution and, in worse cases, may even bring the project to a halt.

However, suppose managers take a systematic approach to schedule the resources. It will ascertain that resources’ skillset is in-line with their tasks and their utilization is as per their capacity. This will also enable project managers to document a well-defined work breakdown structure with a systematic resource plan in place.

Additionally, modern resource scheduling solutions provide data-driven foresight into various resource metrics like resource availability, capacity vs. demand gap, utilization, etc. Based on this, managers can implement the right resourcing measures and eliminate potential bottlenecks.

Overall, intuitive resource scheduling in project management ensures the timely delivery of projects and within budget enhancing client satisfaction.

Given the importance of resource scheduling in a project environment, let’s discuss its benefits.

How does modern resource scheduling & planning benefit businesses?

An effective workforce scheduling system can resolve several challenges faced by modern businesses with the matrix organization. It will provide immense benefits in the following areas:

Maintains and elevates project quality

Having the right person with the right skills is crucial for a project to finish within budgeted time and without disrupting the quality. Therefore, applying the right resource scheduling methodology helps project managers achieve the same by identifying and allocating a competent person.

In the absence of proper scheduling practices, managers will resort to allocating the first visible resources to project tasks. This may lead to the assignment of under or overqualified resources, resulting in budget and schedule overruns. Moreover, skill mismatches can jeopardize the project quality and result in low client satisfaction.

Ensures timely delivery of projects

Project resource scheduling has two major benefits. Firstly, it facilitates the competent allocation of resources during the project planning stage. When skilled employees are assigned to tasks matching their competencies, it guarantees better quality of work and reduces the risk of errors.

Secondly, it allows project managers to schedule the resources for critical tasks in advance. This ensures the availability of niche-skilled professionals for project initiation. Thus, proactive resource scheduling enables managers to avoid last-minute firefighting and facilitate smooth project execution and on-time delivery.

Allows uniform scheduling with enterprise-wide visibility

A robust resource scheduling system can help organizations achieve 360-degree visibility into the enterprise talent pool and its attributes, such as competencies, roles, cost rates, experiences, locations, departments, etc. It also allows supervisors to foresee ongoing and pipeline resource demand, both project and non-project work.

Moreover, the tool provides visibility into resource calendars, including upcoming vacations, PTOs, paid leaves, etc. Such a granular view of resources empowers managers to facilitate uniform scheduling, ensuring that resources are assigned to tasks based on their skills and capacity.

Empowers proactive capacity planning with data-driven foresight

The system’s multi-dimensional forecasting capabilities can provide foresight into resource demand for pipeline projects. It helps managers gauge the upcoming project requirements against the existing workforce capacity to identify short and long-term resource excess/deficits.

Based on this analysis, managers can create a comprehensive capacity plan to address and bridge the gap. For instance, they can adjust project timelines, retrain current employees, or hire a contingent workforce ahead of time. Therefore, the system empowers proactive capacity planning, helping firms mitigate skill gaps and maintain an optimized workforce.

Enhances productivity with optimal resource utilization

Modern resource scheduling systems can forecast billable and strategic utilization of the workforce ahead of time. The tool leverages real-time Business Intelligence and advanced analytics to analyze past and present project data to create realistic resource estimates for future opportunities.

Therefore, it can help managers mobilize employees from non-billable work to billable or high-priority projects to maximize profitable utilization. Moreover, they can bring forward future projects, sell resource time aggressively, or restructure capacity in different areas to avoid capacity wastage and ensure optimal utilization levels.

Reduces project costs ahead of time with real-time financial reports

The system can track critical project financial indicators like resourcing cost, revenue, profit margins, and overheads. It provides reports such as forecast vs. actual that allow organizations to identify financial anomalies and take corrective action to control project costs ahead of time.

For instance, managers can analyze the cost rates of the employees and create an optimal band mix to reduce project resourcing costs. By maintaining a blended combination of senior, junior, interns, and niche-skilled resources, managers can keep projects on track while ensuring higher deliverable quality.

Helps leverage the shared-services model and deliver more projects with fewer resources

Modernized businesses leverage a shared-services model to optimize their operational efficiency and minimize overhead costs. Such a model emphasizes active cross-team collaboration and engagements, allowing firms to deliver more projects despite resourcing constraints.

With the ability to update data in real-time and maintain a centralized data repository, a modern scheduling tool allows seamless management of a shared-services model.

Moreover, it enables project managers to recruit inter-departmental resources from the internal channels rather than incurring additional hiring costs.

In the following section, we’ll learn about the challenges that come with using legacy tools for resource scheduling.

What are the challenges of traditional resource scheduling techniques?

Most project-centric businesses are fighting against pertinent resource management challenges of the 2020s with systems developed in the 1990s.

It is valid for all types of companies irrespective of size, market share, or market reputation. The tools listed below are some examples of legacy systems:

• Silos of spreadsheets built with macros
• Home-grown half-baked systems
• Windows-based systems of the 1990s
• Entry-level resource scheduling system

Most of these outdated legacy tools have the following challenges:

Easy to develop but difficult to maintain

The ease of developing manual processes, such as updating siloed spreadsheets, often comes at the cost of long-term maintainability. Manual processes are prone to errors, and they cannot be updated in real-time. Over time, as projects evolve, maintaining these siloed spreadsheets becomes increasingly complex.

Furthermore, the lack of automation hampers efficiency, and the risk of inaccuracies grows, undermining the reliability of the data repository. Therefore, what seemed like a convenient solution at the onset transforms into a hindrance in the long haul.

Paying a high price for lost market opportunities

Due to the absence of multi-dimensional forecasting and capacity planning, managers fail to manage resource requirements for pipeline projects effectively. Thus, some critical project positions remain vacant when the project is initiated, eventually compelling the managers to give up the project.

Thus, businesses pay a high price for not having the foresight into upcoming resource needs, impacting their ability to capitalize on emerging market trends and potentially losing out on lucrative projects due to insufficient planning.

Unable to provide forecasting and capacity planning

The legacy tools cannot predict the resource metrics and provide data-driven foresight. This inability to forecast resource demands for future projects creates a significant gap in strategic planning.

Managers find themselves without a comprehensive resource capacity plan, making it challenging to align workforce capabilities with upcoming project requirements. This increases the chances of project failures and also results in client dissatisfaction.

Not designed for improving profitable utilization & cost reduction

Since legacy tools cannot forecast billable and strategic utilization of resources in advance, managers resort to unplanned hiring/firing cycles to meet project demands. Moreover, lack of real-time visibility hampers their effort to manage resource under/overloading and optimize utilization rates.

This reactive approach not only increases project resourcing costs but also diminishes the opportunity for managers to implement cost-effective measures. Furthermore, the inability to align resource planning with strategic business objectives further limits the organization’s ability to enhance profitability and operational efficiency.

Unsuitable for matrixed organization structure

The challenges posed by disparate spreadsheets and siloed data are exacerbated in a matrixed organizational structure. The inherent limitations of these tools hamper the efficient functioning of a matrixed organization, where seamless coordination and data transparency are paramount.

Decision-makers find it increasingly difficult to maintain a single source of truth, resulting in effective collaboration across various departments. Therefore, it often results in data duplication, information silos, and inefficient workforce utilization.

Unable to deliver real-time business intelligence

Most home-grown tools do not have advanced business intelligence capability that can provide real-time tailored reports on every resource KPI. Therefore, organizations purely rely on guesstimations and approximations. Unfortunately, this can increase the risk of project failures.

Without real-time business intelligence, firms are unable to adapt to changing circumstances, identify emerging trends, or capitalize on new opportunities. This lack of agility and responsiveness compromises the organization’s competitive edge in a dynamic business landscape.

Now that the challenges of scheduling are clear let’s understand the factors that one must take into account during project resource scheduling.

Factors to consider in resource scheduling

A resource scheduler can consider several factors that can help expedite resource scheduling and make it effective. Here are a few prominent factors to look into while scheduling resources.

Project requirements and objectives

During resource scheduling, one must consider the project’s specific requirements and objectives. It involves determining the scope, deliverables, and goals to understand the type and quantities of requisite resources to accomplish the project.

Resource availability and capacity

Another crucial factor to consider for a resource scheduler is the availability and capacity of resources. Factoring in the factors like shifts, vacations, etc., is also essential as they can impact resource availability to ensure resources scheduled are actually available when required.

Skill sets and qualifications

A resource planner must consider the skills, qualifications, competencies, expertise, knowledge, certifications, experience, etc., to ensure resources have the potential to execute the assigned tasks effectively.

Dependencies and constraints

The resource planner must find out the task interdependencies, constraints, or limitations that can affect the resource scheduling. Creating a critical path for a complex project can also help identify task interdependencies in project resource management.

Project timelines and deadlines

A resource scheduler must also consider project timelines, duration and sequence of tasks, and deadlines. Considering milestone completion dates and critical deadlines is also vital to ensure resource allocation aligns with project scheduling and tasks are completed on time.

Budget and cost considerations

Last but not least, a resource scheduler must also factor in account budget and cost considerations. They must consider the costs of various resources, such as professionals, labor, equipment rentals, raw materials, etc., and optimize resource allocation to stay within the budget.

Given the factors to be considered while scheduling resources, the following section describes the best practices to make project resource scheduling effective.

Best practices for efficient project resource scheduling

Resource scheduling is not only about plugging the hole by scheduling or allocating resources against the projects. It goes much beyond this process.

A comprehensive resource scheduling system includes enterprise-wide resource scheduling, forecasting, capacity planning, utilization management, tracking actuals, etc.

Form a WBS to create task dependencies and create schedules as per resource competency

Pre-planning is essential for project managers to eliminate potential bottlenecks and unnecessary delays. One of the major tasks is to get the right resource for the project tasks.

Managers can do this seamlessly by creating a work breakdown structure that defines all the project’s nitty-gritty and defining task dependencies along with the skills required. Once the details are in place, managers can schedule resources with the right competencies for the bifurcated project tasks.

Leverage resource optimization techniques to manage projects better

Often project managers are caught in a situation where the resources who are allocated the tasks from the critical path aren’t available. With an overview of their availability, managers can use the resource booking software and implement resource optimization techniques like resource leveling or resource smoothing. It will adjust the project timeline based on resources’ availability or pull-in more resources from across departments to complete one task.

Centralize enterprise resource or workforce scheduling

The system should provide a single schedule for the whole enterprise to establish a single source of truth. For example,

• Resource allocation and scheduling can be done in real-time by multiple stakeholders
• Agile resource allocation can be achieved with easy drag and drop
• The schedule can be viewed in numerous ways in a matrix organization structure
• Ensure there is no double booking

Manage the project delivery in a complex matrix organization

Most of the large organizations have now moved into a matrix reporting structure that has multiple dimensions. The resource scheduling system provides visibility of people’s information across the complex matrix organization structure and controls the rights to modify them. It ensures that no resource falls through the cracks and also facilitates project managers to allocate cross-functional resources and ascertain seamless project delivery.

Track competencies in real-time and allocate the right people to projects. It is critical to keep competency information up to date. The right people are assigned to the right project across the enterprise based on skill, experience, qualifications, location, cost rate, etc. This information can be updated by the concerned user, which can be validated before accepting it. Moreover, competent resource allocation is the stepping stone to faster project delivery and an efficient project management process.

Forecast workforce utilization to increase profitability

The system should provide short- or long-term forecasting of billable, strategic, and overall workforce utilization. So that corrective actions can be taken to protect the effective utilization and profitability of your business. As a result, the stakeholders managing different dimensions can foresee the information required to make the right decisions.

Streamline resource capacity planning to bridge the gap

Advanced software should forecast capacity vs. demand from multiple perspectives, i.e., by role, department, team, location, skills, etc. It helps you identify short or long-term shortages/excess of resources ahead of time and reduce undesirable hiring/firing decisions.

Foresee pipeline project demands and plan ahead of the curve

The system should keep track of future project requirements to ensure that your resource pool is optimally balanced and skilled. It will also make it ready to meet the demand of projects in the opportunity pipeline or approval pipeline. It will help in planning hiring or training-related decisions ahead of time.

Track actuals against forecast for future improvements

A comprehensive system should help you keep track of actual time spent against the estimates. So that future forecasting can be improved and aligned to reality. It will also help you monitor shared resources who are working on multiple activities.

Project managers can also benefit from forecast vs. actual reports. They can implement data-driven measures to mitigate the deviation in the actual and forecasted numbers and combat the project roadblocks.

Ensure effective bench management to minimize bench-time

One of the most important factors to be taken care of is bench management. A project resource scheduling software should predict the resources which are likely to end up on the bench. It will enable managers to allocate the next project tasks to the employees before their current project finishes. It will reduce their bench time and help you find the right resource through internal channels, saving hiring costs.

How can resource scheduling improve profitability & productivity?

Resources scheduling can help a business unleash human resources’ full potential and significantly improve profitability and productivity.

Reduce Project Resourcing Costs

With the help of efficient resource management, overall resourcing cost can be reduced drastically:

• Eliminate under/over skilled resources on projects
• Utilize cost-effective global resources without compromising quality
• Avoid last-minute hiring cost through with proper capacity planning
• Reduce unplanned attrition

Minimize hiring/firing cost

Hiring/ firing costs can be reduced by using workforce forecasting and capacity planning. Forecasting enables proactive smoothening of project workload and reskilling employees. Frequent Hiring/Firing creates a negative image for the organization for attracting new talents. It is also an expensive exercise and affects the existing employees’ morale.

Enhance profitable utilization

A business can improve profitability by implementing strategic and billable utilization across the enterprise using effective resource management. As a result, valuable and critical resources do not get assigned to the lesser important projects or activities.

Improve employee productivity

Resource management can improve employee productivity significantly:

• Employees having work allocated as per their competencies and area of interest
• Resources being able to work on different types of projects across the business
• Staff being reskilled to bridge future resource capacity gaps
• Employees being empowered in the early decision-making process

What should you look for in an ideal resource scheduling software?

Resource scheduling is crucial for the performance improvement of modern business. So, a business should not just look for a solution that replaces the current spreadsheet functionalities. It should go much beyond that and ensure that they have a solution that can provide the following:

A workflow-based resource requisition process

Project Managers often get caught up in the endless loop of email trails to request niche resources from the resource managers. This time-consuming method can cause delays or sometimes even cost you the project. Thus, a modern resource scheduling tool in project management should have an automated resource requisition process. It will streamline the method and also keep every stakeholder, decision-maker on the same page.

Scenario-based what-if analysis

When resources are limited, juggling them between projects to fulfill dynamic project requirements is quite common. Applying different workforce optimization techniques on simulated business scenarios helps visualize and compare various impacts. One can either extend timelines or mobilize resources to a high-priority project before arriving at the best outcome under the given constraints.

Scalable, configurable, and expandable

Every business is different, and so are its resource management needs. You can’t have one size fits all. That is why a business should select a scalable, configurable, and expandable tool to meet future business needs.

Procures Real-Time metrics report

Resource demand in a real-life business environment changes every minute. So, it is crucial to gain real-time business intelligence and reports for informed decision-making. Moreover, real-time reports and analytics help project managers monitor and control progress at all times.

Provides data-driven foresight

Resource management solutions should allow your business to do multi-dimensional forecasting over and above scheduling. It also provides real-time business intelligence to improve business performance, profitability, and productivity.

Allows seamless management of matrix structures

Nowadays, most businesses have established a matrix organization structure to achieve the best utilization of their workforce. So, it is critical for a business to have a software system that aligns with its matrix organization structure.

Integrable with other systems

Most businesses have already invested in enterprise-level systems holding quite a bit of data required by a resource management system. This specific information can be a resource profile, competencies project detail, etc. So, the resource management system must integrate seamlessly with existing systems.

Conclusion: – dos and don’ts of scheduling

Dos

• Stay updated with initial resource allocation, availability, and utilization before scheduling more projects.
• Create a resource band mix keeping in mind the project budget and leverage the global shared-services model.
• Analyze the capacity vs. demand gap in advance and implement appropriate resourcing measures to bridge the gap.
• Use advanced features of a resource scheduling solution to filter and search for the right resource for the right job.
• Stay forewarned of future project demands to ensure systematic management of pipeline projects.
• Schedule generic resources for future project tasks to specify the resource demand and book an actual resource once he/she is available to take up the job.
• Conduct upskilling and training programs for benched/lesser-experienced resources to allow them to take up more opportunities down the line.
• Schedule resources to different functional projects to enable and empower them to explore new areas and grow professionally.
• Compare actual vs. forecast utilization and note the deviation to improve resource scheduling for future projects.

Don’ts

• Don’t use silos of spreadsheets to create resource schedules as it may lead to double-booking and overutilization.
• Do not book highly-specialized resources for low-priority tasks. It will lower down their morale and productivity and increase costs, and other critical projects will suffer.
• Refrain from booking resources to a project that they are not interested in. It will reduce their engagement, and they will not be able to use their skills to the maximum extent. It will impact both employees’ and resources’ performance.
• Avoid under and over-allocation of resources, as they both can lead to unplanned attrition.
• Do not book the resources for 100% of their capacity, as their 20-25% time might be utilized for admin meetings, and so on. Keep a buffer to set realistic deadlines.
• Do not book the resources for 100% of their capacity, as their 20-25% time might be utilized for admin meetings, and so on. Keep a buffer to set realistic deadlines.

The Glossary

SAVIOM Solution

SAVIOM is the market leader in providing a futuristic solution for the effective management of resources. It has more than 20 years of experience working with high valued global companies around the world. SAVIOM also provides tools for project portfolio management, professional service automation, and efficient workforce planning. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

For this, they must balance available resources with the ever-evolving demands of projects to ensure successful project delivery. Since this requires strategic foresight into resource capacity and demand, organizations must implement robust capacity planning solutions.

However, to manage capacity and improve resource utilization across the entire organization, one must first know how to measure resource capacity and demand.

Let’s take an in-depth understanding of some concepts that are imperative to measure Capacity and Demand.

What is resource capacity?

Resource capacity refers to the maximum amount of work, task, or project that can be accomplished by a particular resource over a specified period of time. It is the maximum level of output that a resource is capable of delivering.

Unit of resource capacity can be hours, FTE (Full Time Equivalent), person, days, etc.

How to measure resource capacity?

Resource capacity is measured by the timeline and availability of

●       Full-time and part-time employees

●       Permanent employees and contractors

●       Employees hired and joining on a specific date

●       Employees leaving the business by specific dates

Now, let’s consider an example to understand how to calculate resource capacity.

Suppose a company has a policy of working for 8 hours/day and five days/week for a full-time employee. For a full-time employee, the capacity would be 40 hours/week or one FTE or 5-person days.

For a part-time employee working three days/week and 5 hours/day, the capacity would be 15 hours/week. It is equivalent to 0.3 FTE or 1.875 person-days per week.

Now that we know what capacity is, the next step is to understand the various techniques for measuring resource capacity.

What are techniques for estimating resource capacity?

To measure resource capacity accurately, organizations can utilize various techniques. Given below are three commonly used methods:

Historical data analysis:

This technique involves analyzing past project data, including resource allocation, timelines, and outcomes. By examining historical trends, organizations can identify patterns, estimate resource capacity, and determine potential constraints.

Expert judgment:

Expert judgment relies on the insights and experience of individuals or teams familiar with the specific domain or industry. Experts provide subjective assessments based on their knowledge and understanding of resource capabilities, workload distribution, and constraints.

Workload analysis:

Workload analysis involves evaluating the workload of individual resources or teams. It includes assessing task volume, complexity, and duration to estimate resource capacity. This method requires a thorough understanding of project requirements, task dependencies, and workforce capabilities.

Each of these techniques has its strengths and limitations. Organizations can deploy a combination of these methods to obtain a more comprehensive view of resource capacity.

By leveraging these techniques, organizations can gain insights into their current capacity and plan resource allocation effectively. Now, let’s further understand these concepts through an example.

What is resource demand?

Resource demand refers to the number of resources needed to complete a particular task, project, or operation based on its scope and objectives within a given time frame.

The unit of demand for resources is measured in terms of hours, FTE, person days, etc.

Since we are now clear on the concept of the demand management process, let’s learn how to measure demand.

How to measure resource demand?

Resource demand is measured by the timeline and includes the demand for resources required to do

●       Project-related work

●       BAU, admin, support activities

●       Operational activities

Example:

If a company has a full-time working hours policy of 8 hours/day and five days/week, this is equivalent to 40 hours/week.

If an employee is allocated to a project for 48 hours/week, then the corresponding demand is also 48 hours/week. It is equivalent to 1.2 FTE or six person-days per week.

What are the methods for forecasting resource demand?

Organizations can use a combination of statistical and qualitative forecasting techniques to estimate resource demand accurately. Let’s explore each of these methods:

Statistical Forecasting Techniques

Statistical forecasting techniques rely on historical data and mathematical models to predict future resource demand. Some commonly used statistical forecasting methods include:

Time series analysis:

This method examines past data to identify patterns, trends, and seasonality. It applies statistical models such as moving averages, exponential smoothing, and autoregressive integrated moving averages (ARIMA) to forecast resource demand.

Regression analysis:

Regression analysis explores the relationship between resource demand and relevant independent variables, such as sales volume, customer base, or market conditions. It helps identify the factors that influence resource demand and predicts future requirements based on those variables.

Forecasting Models:

Organizations can utilize specific forecasting models designed for resource demand, such as the Holt-Winters method for time series forecasting or the Bass diffusion model for new product adoption forecasts.

Qualitative Forecasting Approaches

Qualitative forecasting approaches rely on expert opinions, market research, and subjective assessments to estimate resource demand. Some qualitative forecasting methods include:

Expert opinion:

Expert opinion involves gathering insights and judgment from individuals with knowledge and expertise, such as HR professionals, managers, department heads, and industry specialists. By soliciting their opinions, organizations can gain valuable insights into factors that impact resource demand, such as industry trends, market conditions, and changes in business strategy.

Scenario planning:

Scenario planning involves developing and exploring multiple hypothetical scenarios that could impact resource demand. These scenarios take into account various factors, such as changes in technology, industry regulations, market fluctuations, and organizational growth or contraction.

Delphi method:

The Delphi method is a structured forecasting approach that involves collecting input from a panel of experts through a series of questionnaires and iterative rounds of feedback. The iterative process allows for convergence on a consensus-based forecast, thus reducing biases and fostering a wide range of perspectives.

Qualitative market research:

Qualitative market research techniques, such as focus groups, interviews, and surveys, can be employed to gather insights from stakeholders within the organization. These methods can provide valuable information about the future needs and expectations of the workforce.

By combining statistical forecasting techniques with qualitative approaches, organizations can obtain a more comprehensive understanding of resource demand.

After getting a thorough understanding of the basics, let’s understand in detail how to measure and address resource gaps precisely.

How to measure resource capacity vs. demand?

Anticipating and bridging resource gaps is crucial for effective capacity planning in project management. Here’s how you can calculate the gap:

Calculate the resource capacity within the organization

The first step to analyzing the capacity vs. demand gap is calculating the organization’s overall resource capacity. To facilitate this, managers need a birds-eye-view of vital resource metrics such as skill sets, competencies, experience, availability, etc. They must maintain a real-time skill inventory of the organization’s permanent, contingent, full-time, and part-time resources.

Further, managers must closely monitor team dynamics, such as departures and new hires, to assess their impact on team and department workloads. It is essential also to track employee time off, planned leaves, or public holidays during project timelines to gain precise insights into overall capacity.

Forecast the demand for upcoming projects

Next, they must forecast the resource requirements of pipeline projects in terms of number, skills, and timeline. For this, managers must have complete visibility into the project pipeline. Based on that, they can gauge what resources (human and non-human) they need for project execution.

Furthermore, they must consider external factors impacting project demand, such as dynamic market conditions, regulatory changes, and technological advancements. Moreover, firms can rely on past project data to create a more accurate resource estimation for upcoming projects.

Perform a demand gap analysis

Once managers have evaluated the resource capacity and the pipeline project demand, they can perform a demand gap analysis to determine whether the firm has a resource deficit or excess. This involves analyzing the expected resource requirements, such as the number of employees, skill sets, competencies, charge-out rate, availability, etc., against the current workforce competency.

For instance, if a specific skill set vital for the project doesn’t exist within the organization, managers can take pre-emptive steps so that the project stays on schedule. This way, the gap analysis acts as a preventive measure, mitigating last-minute bottlenecks and guaranteeing seamless project execution.

Create a plan to bridge the gap

After the supervisors have identified the resource excess or shortage, they can create a comprehensive plan to address the gap. For instance, in case of skill shortages, firms can organize appropriate training/upskilling programs, implement out-rotation and backfill strategies or recruit contingent/permanent resources depending on the project requirements.

Conversely, when organizations have a resource surplus, they can expedite project timelines or sell extra capacity at a discounted rate. In addition, they can bring forward project start dates and competent resources can be allocated in alignment with organizational objectives.

Review the capacity plan regularly

Since capacity planning is an ongoing and iterative process, firms must constantly review their plan to ensure they are always equipped with an optimized workforce. This involves consistently addressing evolving priorities while identifying skill gaps and other resourcing bottlenecks.

Thus, by regularly reassessing capacity plans, firms can pinpoint areas where specific skills may be lacking to accomplish critical deliverables. This empowers organizations to address potential challenges and future-proof.

Let’s look at some measures firms can adopt to enhance the organization’s ability to anticipate and meet evolving demands with an agile workforce.

Best practices for calculating resource capacity and demand

This section explores how organizations can calculate resource capacity and demand to maintain a competitive edge. Let’s go through them one by one.

Centralize all resource-related information

To accurately determine the capacity vs. demand gap, it is crucial to centralize all resource-related attributes, such as skills, availability, utilization, etc., into a single platform. This allows managers to forward plan and assign competent resources to the right job or mitigate any existing resource gaps beforehand to avoid last-minute firefighting. Further, this approach breaks down silos of resource information, thereby minimizing data duplication, promote transparency, and enable more accurate capacity assessments.

Maintain a resource buffer to handle unanticipated changes

Creating a strategic resource buffer is essential for ensuring uninterrupted project progression. By having a readily available reserve of skilled resources, managers can adeptly navigate unexpected shifts in demand and meet task milestones as scheduled. This contributes to enhanced organizational agility, flexibility and resilience within the project framework.

Adapt your capacity planning to meet evolving needs

The business landscape is evolving constantly due to shifting client expectations, technological changes, volatile market conditions, etc. Therefore, managers must adjust the capacity planning process to accommodate these variations. This involves reassessing and adjusting plans to align with changing priorities and unexpected challenges. Further, managers will also need to closely track technological trends to minimize the risk of skill obsolescence. This ensures the firm has an optimized workforce to meet future project demands and maintain a competitive edge.

Foster effective communication & collaboration

Throughout the capacity planning process, it is imperative to facilitate effective and transparent coordination among executives, managers, and stakeholders to ensure everyone is well-informed regarding distinct departmental needs. Additionally, it aligns the entire team with shared priorities and objectives, helps prevent misunderstandings, and facilitates timely adjustments to changing priorities.

Leverage an advanced resource management tool

Relying on legacy tools or simple spreadsheets to evaluate capacity gaps can be challenging and time-consuming. To overcome these limitations, organizations should consider transitioning to resource management software. With the tool’s advanced forecasting and capacity planning module, managers can gain valuable insights into resource excesses and shortages well in advance, facilitating prompt and data-driven decision-making.

Conclusion

Demand management is the holy grail of project resource management that aims to continuously match the demand with capacity for a productive and sustainable business operation.

Moreover, resource capacity and demand are dynamic components requiring continuous monitoring and adjustment. So, embrace the power of accurate measurement and the right tools & technology to thrive in a hypercompetitive business landscape.

Saviom ERM’s capacity planning tool will help you stay ahead of time and take corrective actions by creating insightful resource management strategies.

The SAVIOM Solution

SAVIOM is the market leader in Enterprise Resource Capacity Planning software. It has more than 20 years of experience working with highly valued global companies around the world. SAVIOM also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

Struggling to prevent overbooking and conflicts in your resource schedules?

Tired of endless email chains to book resources for projects?

If yes, then you need a robust resource booking strategy to streamline this critical project management function.

Here’s how it works:

Before the project starts, the project manager estimates the type and quantity of resources required to complete the delivery. This resource requisition goes to the concerned resource manager, who identifies and books appropriate resources on the project. After that, it is the project manager’s job to assign various project members to different tasks.

Due to the rapidly changing nature of the project landscape, managers need to alter resource allocation on various activities frequently. It enhances their billable/strategic utilization. It is when the drag-and-drop capability comes in handy while booking resources for tasks.

This article aims to cover the various steps of project resource booking using drag-and-drop functionality. However, before delving deep, let’s get the basics right and begin with the definition and the importance.

What is resource booking?

Resource booking refers to identifying and scheduling various resources for current and future projects for a specific time. Since resources can be either fully or partially available, managers must consider their availability before booking them for various activities.

Some activities, such as juggling members between existing projects or assigning resources to new opportunities before getting rolled off, come under resource booking. It is also necessary for the managers to ensure that the resources are neither overloaded nor underutilized.

Importance of effective resource booking in project management

When resources are efficiently booked, it helps managers to know if the projects are on track for successful project delivery. First, an efficient resource booking process will help managers identify shortages of critical resources and any scheduling conflicts ahead of time. Early recognition of such potential risks will enable the managers to take measures proactively, like training, hiring, adjusting project timelines, etc.

In addition, a well-designed resource booking process helps prevent conflicts and double bookings. It provides a centralized system where individuals can view the availability of resources in real time and make reservations accordingly. This minimizes the chances of overlapping schedules, double bookings and eliminates confusion among teams.

Moreover, when resources are efficiently booked to projects, it ensures that their utilization is on par with their capacity. Furthermore, a resource booking process will enable managers to foresee whether the resources are working on low or high-priority tasks and accordingly mobilize them to billable projects.

Finally, an efficient resource booking process ensures that competent resources are booked for the right tasks, organizations can complete the projects within the stipulated time and budget. This will help eliminate budget and schedule overruns, maintain project quality, and lead to client satisfaction.

Now that you have understood the importance of resource booking in project management let’s look into the drawbacks of using spreadsheets for the same.

Now, let’s explore the various factors that affect the resource booking process.

Factors to consider before booking resources

Ensuring efficient resource booking is vital for smooth project execution and completion. In the following section, we’ll discuss various factors that play a crucial role in achieving this goal. Let’s go through them one by one.

Project requirements

Project requirements play an important role in determining how, when, and which resources are to be booked. Managers must first clearly define the project goals and objectives and create a WBS (work breakdown structure). It allows them to gauge the skill requirements in terms of type, quantity, and competencies for each project phase.

Based on that, managers can identify and schedule competent resources from the internal pool that match these skill specifications. Therefore, determining the project requirement allows managers to align their resource bookings with the project’s goals and ensure successful delivery.

Resource availability

Managers must determine if the organization possesses the requisite resources for a seamless resource booking process. If not, there is a risk of over-allocating or double-booking existing personnel. Further, the situation can turn even more complex if niche-skilled resources are unavailable, given that they are not easily replaceable.

Therefore, managers must ensure resource availability for projects in advance and consider implementing resourcing treatments like out-rotation & backfill or planned hiring. This guarantees that essential resources are at hand to initiate the project on time.

Resource competencies

When booking resources, it is imperative for managers to evaluate resource competencies to ensure seamless project execution. This is because when the right skilled resources are deployed to suitable tasks, they are more productive, less likely to make mistakes, and deliver high-quality outcomes consistently.

However, if an organization doesn’t have the requisite resources, it can either train existing personnel or hire a permanent/contingent workforce to meet the demand. This enables managers to schedule competent resources for projects, ensuring timely project initiation and execution.

Workforce constraints

While booking resources for projects and tasks, managers may encounter several challenges, such as a shortage of niche skilled resources, employee absenteeism, unplanned attrition, etc. Failure to manage these resourcing constraints can lead to project delays and financial losses.

Therefore, creating a well-structured risk mitigation plan to identify and manage these bottlenecks becomes crucial. Managers must forecast project resource demand ahead of time to ensure they have the right people within the organization. Moreover, they must consider employees’ leaves and paid time off before booking them for tasks.

Project and task priority

Managers must carefully consider project and task priority when booking resources, especially in a resource-constrained environment. This approach ensures that scarce, niche-skilled professionals are readily available to work on critical assignments. Furthermore, it prevents the scheduling of over/under-skilled employees to critical tasks, which can result in disengagement, burnout, and sub-par deliverable quality.

Thus, project and task prioritization empowers firms to tackle time-sensitive tasks with approaching deadlines first and optimize the resource booking process. Consequently, it enables managers to efficiently manage profitable projects, prevent unnecessary delays, and ensure on-time delivery.

Now, let’s understand the various setbacks to using spreadsheets to book resources.

Challenges of booking resources using spreadsheets

The market is flooded with a plethora of modern solutions to assign resources to projects efficiently. Yet, many organizations still rely on legacy tools like spreadsheets to book resources on projects. These tools have their limitations and fail to overcome market uncertainties and globalization. Here’s how:

Prone to errors

Spreadsheets are time-consuming and cumbersome. They are also susceptible to human errors during reconciliation, creating erroneous data and a spiraling effect on resource analysis.

According to MarketWatch, “88% of spreadsheets contain some form of errors.”

Creates siloed data

Spreadsheets fail to provide enterprise-wide resource visibility. So, it’s hard to identify and assign the right resources to projects at the right time and cost. Subsequently, delivering projects on time and within budget becomes challenging.

Unable to provide real-time data

Spreadsheets are unable to consolidate data on a single platform. As a result, discrepancies and redundancy can lead to double booking of resources. In addition, without real-time information, decision-makers cannot make timely decisions to improve the organization’s health index.

Difficult to maintain

Though spreadsheets are easy to develop, they are somewhat helpful in meeting initial business requirements only. But as the business expands and changes, spreadsheets fail to meet its current and future needs.

Cannot respond to dynamic market conditions

Spreadsheets lack the functionalities to respond to evolving demands. These tools cannot help determine if a new project can be accommodated within existing constraints, resulting in lost market opportunities.

The solution to these problems is replacing spreadsheets with multi-dimensional resource booking software. Using this tool, one can book resources quickly and effortlessly with an easy drag-and-drop functionality.

Let’s understand the benefits of drag-and-drop functionality in resource booking.

Advantages of drag-and-drop resource booking

As the name suggests, this feature of resource booking software is a fast and efficient way to plan schedules, meetings, project timelines, and resources. Below are some of the top benefits of drag-and-drop resource booking:

Simple and easy to use

One of the main attractions of drag-and-drop capability in resource booking is its simplicity. One can book resources on tasks or projects in just two clicks, proving to be a real-time-saver for managers. Besides, with no learning curve involved, one can start resource planning and booking resources straight away. The drag-and-drop feature is also instrumental in enabling real-time agile resource booking.

Visually easy to comprehend

Drag and drop capabilities enable you to see changes instantly and provide a quick overview. Due to the visual changes, all relevant parties can see the updates in real-time. It means that everyone is on the same page, and there is no confusion about missed deadlines or scheduled meetings. In addition, it saves you from the hassle of spreadsheet reconciliation and double-booking errors.

Instant alert during resource overload

In matrix organizations with resources working on different projects and having multiple reporting lines, losing track of resource capacity is easy. As a result, double bookings resulting in resource overloading are inevitable. Resource booking system consolidates and tracks resource-related information in real-time. So, when a resource overload is caused by a new booking or editing an existing one, the user gets instantly notified. The user can also view the exact overload hours on the schedule chart and reassign accordingly.

Keeps work organized

Unlike spreadsheets, drag-and-drop resource booking software eliminates the endless loop of emails and ensures that any relevant information isn’t lost. While juggling multiple resources and bookings, one can easily zoom in on a particular booking daily or weekly and simultaneously zoom out to track resource engagement over the next quarter, six months, or year. By consolidating all bookings on a single resource plan, managers can easily track project progress, and your team knows what tasks they need to accomplish.

Make changes to bookings effortlessly

Often, when there is a sudden ramp-up activity, finding resources at the right time may not be feasible. Managers can kick-start new projects using resource optimization techniques such as resource leveling or smoothing. The drag-and-drop feature on the resource booking system makes edits effortless and quick. You can also gauge the impact of these changes on other bookings and make modifications accordingly.

Since the benefits of drag-and-drop resource booking are clear, let’s know some of the best ways of resource booking in organizations.

Best practices for resource booking

Implementing some methods can help streamline the resource booking process, improve efficiency, and boost user satisfaction. Below are some of the best practices of project resource booking used across industries. Depending on the situation and requirement, one can apply the ideal one.

Simple booking

This type of booking entails assigning a resource to a single project. One can select the appropriate dimension on the schedule chart and book a specific resource on a project using the drag-and-drop functionality. Depending on the project’s duration, managers can apply suitable timescales like daily, monthly, quarterly, or yearly to book a resource for a specific timeline. One can use a few clicks to define booking details such as project, task, start and end date, effort, role, etc.

Split booking

Overallocation causes employee burnout, compromised work quality, and eventually leads to turnover. Therefore, managers must avoid constantly overloading resources with work. A warning message alerts the concerned manager if a resource gets overloaded with work. They can split their bookings accordingly to optimize and avoid the overallocation. Also, sometimes, resources go on vacations or suddenly leave the organization in the middle of the project. To avoid project delays due to unavailability, managers can split their bookings and reassign them to other available resources.

Bulk booking

In the event of sudden ramp-up activities within a project, an influx of multiple resources is the need of the hour. It can be painstakingly time-consuming if managers have to identify and allocate numerous resources to tasks. Bulk booking can simplify the process by resource scheduling to a project in one go. Using suitable filters, managers can select appropriate resources based on their skills, role, location, and more across the enterprise and book them to a project in just a few clicks. This practice can be a saving grace in the dynamic project management landscape.

Reoccurrence booking

If a booking needs to be repeated later, then a re-occurrence booking is practical. In this case, managers need not create a new booking and simply repeat the booking with just a click of a button. One can also specify the frequency of reoccurrence booking, be it daily/weekly/monthly/yearly, and set the number of times the activity needs to be repeated. This best practice of resource booking saves time and ensures that for a frequently recurring booking, managers don’t end up missing any occurrence.

Generic resource booking

This type of project resource booking system helps fulfill future project demands. Managers can start planning once a project reaches the opportunity or approval sales pipeline stage. Managers can book generic resources first. Once confirmed, managers can reassign these dummy resource bookings to named enterprise resources matching the qualification criteria.

Bulk update

Imagine the following scenarios:

• A single project with multiple resources already assigned to it gets delayed.
• Or, a single resource booked on various projects suddenly goes on leave.
• Due to a sudden high-priority project, the team has to shift their bookings to a later date range.

Editing the bookings individually can be arduous and time-consuming for all these scenarios. In such cases, bulk update, wherein multiple bookings can be revised and updated, is valuable. It simplifies the process significantly, and managers can adjust bulk bookings with just a few clicks.

Bulk copy resource

Sometimes, a new project has a similar structure to a previous one. In such cases, a bulk copy of resource bookings of one project can be duplicated on another project effortlessly without involving the hassles of creating new bookings from scratch. The project manager can directly copy all the bookings of the previous project into the new one in bulk instead of assigning them individually.

Bulk copy by role

This best practice of resource booking is ideal for future and pipeline projects that require similar roles to that of a running project. For such a project, managers can avoid creating individual bookings and generate a bulk copy of resource bookings by role. Once copied, they can simply replace real names with generic ones. Then, when the project probability is confirmed, managers can reassign those dummy bookings to existing resources having the same role and other desired qualifications.

These are some of the best practices that can enable effective resource bookings. Next, let’s see how resource booking software can help in efficient resource scheduling.

Conclusion

To sum up, resource booking software with simple drag and drop has revolutionized how managers conduct project resource planning. Its simplicity and ease of use have made agile resource planning efficient and precise, enabling the successful delivery of projects within time and budget. So, it’s high time businesses still use legacy tools like spreadsheets for project resource booking to invest in modern resource management software. Real-time resource booking systems help organizations enhance profitable utilization and complete more projects with fewer resources.

The Glossary

SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped over 100 customers achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software that is customizable as per business requirements.

Resource management has become an integral part of any business today. It emerged as an independent discipline after organizations became complex with matrix structures and expanded in multiple geographies.

Efficient project resource management software provides centralized data into a single repository and a single version of the truth.

Its components include resource scheduling, resource forecasting & planning, capacity planning, business intelligence/reporting, integration with other related applications, and more.

This blog explains all its necessary concepts and aims to steer you through a successful journey as a resource manager.

Let’s begin with its formal resource management definition.

What is resource management?

Resource Management is the process of planning, scheduling, forecasting, and optimizing the entire resource lifecycle for successful project delivery. It involves managing resources such as people, equipment, materials, facilities, etc., to ensure they are utilized optimally and aligned with organizational objectives.

The main aim of resource management is to fulfill the project requirements and ensure the productive utilization of every resource across the organization. In addition, it helps build a future-ready workforce, improve business profitability, and beat market volatility.

Now we know the basics, let’s understand the significance of resource management.

Importance of resource management

Managing resources effectively plays a significant role in improving a business’s profitability and sustainability. It ensures that the right resources are available at the right time and cost for successful project completion. Let’s understand why resource management is important for business profitability and sustainability.

Minimizes project resource costs significantly

According to Deloitte, “Cost reduction takes precedence over other business initiatives.”

Effective resource management solutions provide enterprise-wide visibility that allows resource managers to utilize cost-effective global resources from low-cost locations. Depending on the project requirements, managers can create the right mix of local and global or on-demand and permanent resources. Moreover, they can leverage a balanced mix of junior and senior employees for every project to ensure high-quality deliverables and reduce project resourcing costs.

Enhances billable resource utilization

Resource management solutions empower managers to forecast workforce utilization in advance, which helps mobilize employees from non-billable to billable and strategic work. It also provides visibility into resources that are about to be rolled off from projects. Managers can either bring forth project timelines or assign them to existing project vacancies to their improve billable utilization.

Bridges the capacity vs. demand gap proactively

Demand forecasting, a resource management function, allows managers to foresee pipeline resource demand ahead of time. This enables managers to assess and analyze the skills gaps within the existing workforce. Consequently, in case of excesses and shortages, they can formulate a suitable action plan to proactively bridge the capacity vs. demand gap and avoid last-minute firefighting activities.

Leverages scarce resources effectively in a matrix organization

The resource management process facilitates the effective utilization of highly skilled resources in a matrix organization. It allows collaboration and movement of resources across different departments and geographical locations. As a result, scarce, niche-skilled resources can be assigned across different projects rather than one high-priority project. Therefore, the shared services model enables managers to create and leverage cross-departmental teams for current and future projects.

Creates the best resource plan using what-if analysis

A robust resource management tool offers a ‘what-if analysis’ feature that allows managers to create and compare different resource scenarios and their potential outcomes. This includes assessing the scenarios from multiple dimensions, like revenue generated, employee availability, etc., to identify and apply the most profitable option to the actual resource plan.

Improves the organization’s resource health index

A modern resource management solution provides real-time reports and analytics that help monitor key resource KPIs such as capacity, availability, demand, utilization, etc. Thus, in case of negative variances, managers can implement corrective actions promptly. Moreover, it facilitates training/upskilling programs, enabling resources to enhance their competencies, further improving the organization’s resource health index.

Delivers projects and services within time and budget

An efficient resource management process allows managers to facilitate competent resource allocation. This prevents under/over-skilled resources from being assigned to mismatched tasks. Thus, when the right people work on the right projects or tasks, they are more productive and able to meet project deadlines effectively. Furthermore, enterprise-grade resource management solutions allow firms to monitor and control resource-centric risks. This enables them to minimize the risk of delays or budget overruns, ensuring timely project delivery.

Now that we know the significance of effectively managing resources let’s dive deep into its major resource management components.

What are the components of resource management?

Here are the main components of resource management in project management:

Resource scheduling

Resource scheduling involves identifying and allocating resources for a specific period to different project tasks. These tasks can be anything from billable, non-billable, or BAU work.

With a centralized Gantt chart view of the enterprise, resource scheduling eliminates silos of spreadsheets. It also facilitates you to deploy competent resources to the right job to finish the project within budget and time.

Resource utilization

Resource utilization measures the amount of time spent by the employees on different project tasks against their availability. It is a key performance indicator in the modern business landscape as it directly influences the firm’s bottom line.

Utilization can be measured in terms of:

• Overall resource utilization
• Billable utilization
• Strategic utilization
• Non-billable utilization

Resource Managers can proactively mobilize resources from non-billable to billable/ strategic tasks and maximize their billable utilization.

Resource forecasting

Resource forecasting helps managers predict resource utilization levels in advance and foresee the resources likely to end up on the bench. In addition to these, they can also stay forewarned of the required capacity for pipeline projects.

Leveraging this information, one can

• Mobilize the resources to billable tasks from non-billable or BAU activities.
• Ensure effective bench management
• Bridge the capacity and demand gap

Resource planning

Resource planning is the comprehensive process of planning, forecasting, allocating, and utilizing the workforce most efficiently and intelligently. Resource capacity planning is an undertaking to analyze and bridge the capacity and demand gap well ahead of the curve.

These two components are vital to ensure that none of the project vacancies go unfilled or excess capacity gets wasted. Simply put, resource and capacity planning maximize optimal utilization and timely project deliveries.

Business intelligence and reports

Business intelligence provides actionable insights by performing extensive data analysis. Using real-time data, individualized reports, and dashboards, critical resourcing metrics are analyzed for decision-making. These reports strengthen the managers’ decision-making abilities and allow them to monitor the overall resource health index.

Now that we know the basic components, let’s learn about key resource management techniques.

What are resource management techniques?

Resource management techniques refer to the strategies and methods employed to effectively allocate and utilize various resources within an organization or project. These techniques are critical to solving resourcing conflicts such as overallocation and underutilization.

There are two types of resource management techniques:

Resource leveling

Resource leveling is a technique used in project management to adjust project start and end dates based on the availability and schedule of resources. It is applied to projects with flexible timelines to ensure an even workload for team members and prevent over/underutilization.

Example of resource leveling:

Let’s consider a software development project where a team of programmers is working on different modules of a software application. The project manager notices that two critical modules require the expertise of a senior programmer, but there’s only one senior programmer available.

Without resource leveling, the senior programmer might be overloaded with work, leading to burnout and potential delays. To avoid this scenario, the project manager can adjust the project schedule by changing the start and end dates of the two critical modules. This would allow the senior programmer to work on one module at a time without being overloaded.

Resource smoothing

The resource smoothing technique is applied to time-sensitive projects. It involves allocating additional resources, redistributing workload among existing team members, or adjusting float tasks of projects without changing the critical path. Resource smoothing focuses on resolving resource overutilization while keeping project schedules and timelines fixed.

Example of resource smoothing:

Let’s consider an audit and accounting firm with a limited pool of consultants. During the financial year-end, there’s typically a surge in client demand requiring tax filing assistance. In this period, the tax department is overwhelmed with work, leading to overloading and burnout.

To reduce the impact of overutilization on team productivity and project workflow, the firm can hire additional on-demand tax consultants during the peak season to redistribute the workload. This will allow the audit and accounting organization to meet tax deadlines and client expectations without overexerting the internal team.

Now, let’s dive deep into some of resource management’s best practices.

What are the resource management best practices?

We know that effective resource management is essential for organizations striving to optimize productivity and achieve their goals. Therefore, adopting the following approaches can prove instrumental in this endeavor. Let’s understand.

Create centralized visibility of resources across the organization

The first step in efficient resource management is to consolidate all resource-related information, like skill sets, experience, capacity, availability, demand, cost rate, location, etc., on a centralized repository. It helps create a single version of truth for the entire organization and eliminate information silos, resulting in better decision-making.

This centralized visibility allows managers to visualize which resources are currently working on which projects. Moreover, it enables managers to identify and allocate the best-fit resources to projects and tasks with matching competencies to ensure competent allocation.

Forecast resource shortages/excesses and bridge the gap

With the help of advanced forecasting capabilities, managers can predict the resource requirements for pipeline projects. They can perform a capacity vs. demand analysis to identify the shortages or excess of resources and implement necessary corrective measures to bridge the gap.

For instance, in case of skill shortages, firms can hire contingent or permanent staff, train existing resources, or implement out-rotation and backfill strategy. Conversely, when there is a resource excess, managers can bring forward the project timelines or initiate training/upskilling to ensure projects commence on time.

Allocate right resource for the right project at the right time

Allocating the right resources to the right project at the right time and cost is crucial to ensure successful delivery. With a 360-degree overview of the talent pool, managers can assess resource competencies and assign the best-fit personnel instead of the “first-visibility-first-fit” resources to every opportunity.

Moreover, they can strategically distribute the skilled resources across projects rather than assigning them to a single high-priority project. Additionally, if a low-cost, competent resource is available then managers can assign them to the project instead of a high-cost professional.

Forecast and maximize billable utilization of resources

The overall profitability of an organization depends on the optimal utilization of resources. Thus, it is important to ensure that the workforce is efficiently engaged in billable projects as per their capacities. With advanced color-coded heatmaps and reports, managers can gain foresight into the utilization levels of all resources.

In case of overutilization, managers can implement appropriate optimization techniques such as leveling and smoothing to adjust project timelines or deploy additional resources to ensure even workload distribution. In cases of underutilization, firms can mobilize resources from non-billable to suitable strategic projects or sell excess capacity at discounted rates.

Leverage the right mix of local and global resources

Due to globalization and increased competition, many multinational corporations are expanding their operations across geographies to meet growing client demand, reduce costs, and boost profitability. By gaining complete visibility into the talent pool across the matrix boundaries, managers can create a balanced mix of local and global resources.

They can implement a multi-location policy if local resources for a specific skill set are unavailable, minimize resourcing costs, and provide round-the-clock customer support. Moreover, even if initially these hired resources show potential but lack proficiency, firms can leverage senior staff to provide suitable training and mentorship to improve their competencies and maintain project quality.

Empower resources to choose projects of their interest

Human resources are indispensable assets for most organizations, so ensuring they deliver consistently at high productivity is important. To achieve this, firms must offer opportunities that align with their resources’ qualifications, experience, capacity, availability, etc., to keep them motivated and engaged.

Further, organizations must also empower resources to choose projects of their interest. Managers can implement IDPs, i.e., personalized career paths that cultivate a sense of purpose and enhance resource satisfaction. This, in turn, will ensure that resources are happily engaged in work, leading to improved business outcomes

Gain real-time business intelligence for accurate resource insights

A robust business intelligence tool helps organizations analyze large volumes of business data and take data-driven decisions. With BI-enabled resource management software, firms can get accurate insights into various resource and project metrics such as availability, capacity vs. demand, forecast vs. actual cost, etc.

Managers can utilize this information to identify and mitigate potential risks before they derail project progress. For instance, a forecast vs. actual cost report helps review if the project is progressing as per the estimated budget. If there is a variance, managers can implement cost optimization measures to control budget overruns.

In the next section, we’ll learn about the vital resource management skills that every manager must possess.

What are resource management skills that every manager should have?

Resource managers have multiple responsibilities to account for when managing the most significant investment of the firm. From understanding the talent pool to being the key link between PMOs and the workforce, they have a lot on their to-do list.

Here’s a list of resource management skills for a manager to streamline this complex process:

Communication skills

Resource managers are accountable for fulfilling resource requirements from project managers by assigning the job to the right resource. Since they act as mediators in this process, it’s imperative to have exemplary communication skills. It will enable them to explain the roles and responsibilities to the resources better while also making reasoning with the project managers seamless.

Conflict resolution

Often, multiple project managers end up requesting similar-skilled resources. In this case, if the project prioritization criteria are not in place, it may lead to conflicts. Also, a lack of transparency in defining goals and objectives can lead to resources being clueless, which can also result in discrepancies. It’s the job of a resource manager to intervene, set the expectations right, and ensure that everyone is on the same page to keep the work going. This is why conflict resolution skill is a mandate.

Domain knowledge

To allocate the right resources to the right job, it’s important that managers understand the skillset very well. If a resource manager with no engineering knowledge works for an engineering firm, it will put forth resource planning challenges in the long run. For this, they must have domain expertise to get more clarity.

Proactive planning

Every project manager aims to complete the project within time and budget, which makes forward planning a critical aspect. Since success highly relies on the workforce, resource managers need to be extremely proactive to fulfill the demand. They should be quick-witted to make calculated decisions about implementing the right resourcing treatments to ensure resource availability for projects.

Negotiation skills

Resource planning is a complex job and brings forward a myriad of challenges for the resource manager. For example, a project manager has requested an employee with advanced-level technical skills. If one skill is missing and it’s expensive to hire another resource, managers have to convince the project owners. In such cases, managers must be able to negotiate well and get the job done.

Risk management

What if a resource takes prolonged unplanned leaves? What happens if there is unplanned attrition? A running project can come to a halt. How would a resource manager tackle this situation? If they have a backup plan, these situations will seem easy to deal with. Risks are inevitable in the project landscape. Thus, resource managers should hone their risk management skills with forward planning to keep the project going.

These are some of the imperative resource management requirements and skills for a resource manager. Let’s now understand which businesses can reap the benefits of managing resources efficiently.

Types of businesses that require enterprise resource management

Organizations with a matrix-based set-up, cross-functional teams, and a shared-services model require enterprise resource management. The level of complexity to which they adapt the business processes depends on their size and functions. Yet, today it is part of every organization’s DNA.

Industries such as IT services, construction & engineering, audit & accounting, and professional services organizations, etc., have implemented robust resource management processes.

Other crucial factors that affect the better management of resources are firms working on multiple projects in ad-hoc environments. It means that they are exposed to several changing variables like project priorities, resource availabilities, and budget constraints.

These complexities demand enterprise-wide visibility and real-time updates to help managers stay informed at all times. They need to manage their resources diligently and finish the projects within budget and time. Therefore, organizations need to invest in enterprise-grade solutions to effectively utilize their resources irrespective of the industry type.

Formulating a project resource management framework is only half the battle won. It is equally important to implement this strategy using an appropriate tool to meet specific organizational needs. Otherwise, it will have an adverse effect on the entire resource pool and the firm’s reputation.

Let’s learn about some consequences of a poor resource management framework.

Consequences of poor resource management strategy

When organizations adopt inefficient resource management processes and techniques, it can drastically affect project delivery and overall profitability.

Here are some of the negative impacts of poor resource management strategy.

Increased project costs

Incompetent allocation or booking of high-cost resources instead of the low-cost but similarly skilled workforce spikes project budget. Since the resources’ skills and competencies are not leveraged most effectively, project costs will increase, causing unnecessary budget overruns.

Reduced employee performance

Poor employee performance is the first and foremost indicator of sub-optimal resource management. Unrealistic expectations, over-allocations, or bookings without considering employee interests and skills can contribute to reduced engagement and productivity. It will adversely affect the project’s quality and lower employee morale.

Delays in meeting project deadlines

Without visibility of team members and their skill sets, organizational resources may get allocated to projects that do not match their competencies. It can result in delivery delays as significant time will be spent learning on the job before becoming productive. Further, delays in meeting deadlines also blow up project costs.

High employee turnover

Employees feel disengaged and dissatisfied when their strengths and skills are not exploited at their best. Over-allocating resources due to unrealistic deadlines can lead to employee burnout. These circumstances can compel your valued talent pool to look for opportunities elsewhere, which will gradually increase employee turnover.

Client dissatisfaction and loss of business

Inefficient resourcing practices lead to poor resource allocation, which causes teams to put in long hours to meet project goals. Tight deadlines and a heavy workload can put the allocated resources under pressure, thereby increasing the likelihood of errors. Delayed delivery, compromised quality, and budget spikes jeopardize project health, resulting in client dissatisfaction and, eventually, business loss.

The decision-makers must, therefore, formulate an efficient resource management plan to avoid facing these consequences. Managers can develop this plan using advanced software.

Resource management trends to look forward to

The emergence of innovative and advanced technology has created a paradigm shift in the ways resources are managed. Comprehensive resource management tools are developed using Business Intelligence that provides precise insights into resource metrics and promotes data-driven decisions.

Here is the list of trends you will witness in the near future:

Going beyond simple scheduling and planning tools

Most resource managers implement basic scheduling and planning tools to efficiently manage resources and allocate tasks to them. However, as mentioned earlier, it goes beyond these concepts and covers a lot more. Thus, firms will soon start investing in holistic resource management tools that maintain a single version of the truth across the enterprise and provide all features under one roof.

Replacing guesstimations with real-time forecasting to plan future projects

While managing resources, many managers still implement resourcing treatments based on mere assumptions and guesstimations. A modern tool will replace that with real-time forecasting. Managers will get precise foresight into project resource demands, resource availability, utilization, and more.

Using Business Intelligence to derive reports and maximize utilization

Modern resource management software is integrated with business intelligence that derives information from the data and provides intuitive reports in real-time. Managers can use these reports to assess and improve various metrics. For instance, they can maximize the productive utilization of the workforce, which will enhance their productivity.

Switching from emails to a well-formulated resource requisition workflow

Resource and project managers still send endless trails of emails to get the required resources. Advanced software will change this by helping you form a resource requisition workflow. The first-come, first-serve basis will become obsolete, and priority projects will take precedence. Moreover, it will form an audit trail that will give absolute transparency regarding resource requirements to all the stakeholders and management.

Implementing modeling & simulation to form the best-fit resource plan

Creating a resource plan involves a lot of analysis to eliminate potential bottlenecks in the future. An advanced tool brings a compelling feature, ‘what-if analysis,’ into the picture. Accordingly, managers can leverage it to simulate different variables, form the best-fit resource management plan, and mitigate against potential risks.

Empowering employees to choose their areas of interest

Businesses have restructured to become employee-centric, which helps them grow professionally while the project needs are taken care of. To stay one step ahead, managers can now create an open seat for relevant project positions and allow employees to choose their areas of interest. It will enable them to diversify their portfolio, hone their skills, and increase productivity.

Introducing a well-defined out-rotation policy for employee retention

When a critical resource is working on one project, managers tend to deploy the same resource to similar projects in the future. It creates a limitation for the employees as they don’t get to work on multi-faceted projects. Thus, resource managers must formulate a well-defined out-rotation policy that will provide fair chances to every employee. This will help facilitate all-around resource development and improve organizational efficiency.

These are some of the latest trends in this space that will facilitate managers to unleash the maximum potential of their workforce and maintain a competitive edge.

Over to you

It is now evident that a complete resource management plan is crucial for the success of any business. It is not a ‘one size fits all’ process. Every organization operates differently and, therefore, needs a tailored project resource plan that suits its needs.

Therefore, it is imperative to use the right resource management system and processes to manage the most expensive investment of your organization, your workforce!

What process do you follow to ensure efficient management of resources?

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The Glossary

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While assigning resources to tasks, the concerned project manager is expected to look into their day-to-day involvement and provide guidance. Unforeseen circumstances can create a resource crunch that adversely affects project delivery:

What if some employees get sick, take a sabbatical, or change jobs? The project managers must ensure that the other related resources are not overloaded, disengaged, or become unproductive in their respective tasks.

To utilize project resources effectively and ensure they meet their anticipated performance goals, project managers play the role of both people manager and functional manager. Project resource management techniques address how resources must be managed while working in different project situations.

This article aims to cover the essential aspects of project resource management, including a step-by-step guide to creating an effective project resource plan. However, before delving deep, let us begin with the project resource management definition:

What is project resource management?

Project resource management involves estimating and allocating the right resource to the right opportunity and utilizing them efficiently for successful project delivery. It measures every team member’s productivity and helps you take proactive measures to maximize billable/strategic utilization.

Effective project resource planning provides a clear picture of who is doing what and how long they need to accomplish the same. It helps you visualize underutilized resources or those getting rolled off from tasks and re-allocate them to suitable project vacancies.

Efficiently managing resources in project management also enables you to answer questions like:

Do I have sufficient resources to finish a job?

Or do I need to hire someone else?

How can I reduce project resource costs and complete the delivery?

Therefore, project resource management is a continuous process, and by implementing the right solution, one can take preventive measures to meet the overall objectives.

What does a resource management plan mean?

According to the Project Management Body of Knowledge (PMBOK), a resource management plan is “The component of the project management plan that guides how project resources should be categorized, allocated, managed, and released.”

A resource management plan is a roadmap or framework that helps organizations acquire, allocate, and manage resources effectively to meet the project goals. This plan is essential for managers to evaluate what type and quantity of resources are needed and when they are required in a project.

Some crucial elements to be included in a project resource planning are:

• A comprehensive list of the types and number of resources required to complete a project.
• The costs associated with managed resources.
• Does the organization have the required resources, or do they need to hire them or outsource the work?
• The processes that will be used to allocate the resources and forecast future requirements.
• Various techniques to manage resources effectively.
• Various policies and procedures related to resource hiring or workload management.
• Defining the metrics to measure the performance of resources.

Now, let’s look at the various resources used in project resource management.

Types of resources used in project management

People, processes, and technology, also referred to as the golden triangle, are essential for successful project implementation. So, to get the work done, you need labor, and they, in turn, need materials, equipment, and a place to carry out the project activities.

On an enterprise level, project resources can be human and non-human, which includes but are not limited to:

Labor

Labor or human resources comprises employees (part-time or full-time) and contingent staff with various skill sets required for delivery. Labor is essential to execute tasks necessary for the successful completion of projects. Managing them diligently ensures that the right people are in suitable roles and work efficiently to help achieve the project objectives.

Consumables & materials

Consumables and materials are essential in project management as they directly impact the cost, quality, risks, etc., and are needed to generate the final product. For example, the materials for a road construction project are soil, rock aggregates, binders like lime, bituminous materials, cement, etc. Managing these resources is crucial as they ensure the successful completion of projects within the committed time and budget while meeting the quality and regulatory requirements.

Equipment & tools

Tools and equipment play a vital role in project management as they help perform specific tasks within a project. For instance, software development projects require computers and various software to complete their tasks successfully. Tools and equipment cover all the tangible assets (machinery, plant, equipment, etc.) and intangible assets (software, process, methods, and ideas). These assets might change depending on the type and nature of the organization. Managing these resources ensures uninterrupted project execution, contributing to success.

Facilities

Facilities in project management constitute the physical infrastructure, resources, and environment necessary for project execution. It includes land, conference rooms, office space, accommodation, storage facilities, etc. Providing appropriate facilities, like meeting rooms for team meetings, discussions, presentations, etc., can help improve team members’ productivity and communication.

Finance

Money is essential to procure the resources and carry out the necessary work. Furthermore, budgeting is key in project management to plan and control the project expenses. Accurately estimating the costs will help organizations analyze if they need to proceed with a project and how effectively they can allocate their financial resources. Efficiently managing the finances will enable managers to make informed decisions, control costs, prevent budget overruns, and deliver projects within budget.

Knowing the essential types of resources required in project management, let’s understand the key characteristics of human resources.

Characteristics of human resources in project management

Resources help in delivering the tasks effectively. Team members provide extra hands and mind to complete the work. Similarly, equipment, technology, and processes amplify workforce efficiency.

However, while assigning resources to projects, one must consider the following characteristics of human resources:

Resource availability and capacity

Capacity is the total number of hours an employee is available per employer arrangement. Availability is the time the resource can spend on the project. So if a resource’s capacity is 8 hours a day and he works on another project for 3 hrs, his availability is 5 hours. Both availability and capacity play crucial roles in project resource planning and allocation.

Resource Capabilities and Skills

The workforce brings the required skills, experience, and expertise to help various projects meet the deliverables. Simultaneously, people also need a plethora of appropriate tools and technology to complete their work. Therefore, project managers must consider the resource’s skills and capabilities before scheduling tasks.

Flexibility and adaptability attributes

Since project management deals with dynamic and unpredictable situations, human resources must demonstrate qualities such as adaptability and flexibility. Therefore, managers must consider the resources capable of adapting to changing project requirements, priorities, and timelines. Moreover, they should be open to new ideas, willing to learn, and ready to handle unforeseen challenges.

Effective communication skills

Communication is critical in project management, and human resources are crucial in ensuring effective communication among team members, stakeholders, and project managers. Employees possessing strong verbal and written communication skills can convey information concisely and accurately and foster open and transparent communication channels.

Leadership qualities

Human resources demonstrating excellent leadership qualities and the ability to influence others steer the projects to success. They inspire and motivate team members, provide guidance and support, nurture a positive work culture, promote teamwork, and effectively manage conflicts. Moreover, they instill a sense of ownership and accountability among the project team.

Now, let’s understand a resource manager’s key roles and responsibilities in managing project resources.

Why is project resource management important?

As a project manager, your primary concern is: How do I deliver a project on time and within the stipulated budget?

An effective project resource management strategy aims to meet delivery commitments and enhance client satisfaction. It also improves the team’s performance, engagement, and productivity.

Once you have the resources and the skills in place, you need to master the art of scheduling, forecasting, and planning efficiently for the project’s success. Efficient project resource management also ensures maximum billable resource utilization for profitability.

A powerful resource management solution can unleash the potential of your workforce. Here is how:

Reduces project costs

Complete visibility across the enterprise helps leverage global resources from low-cost locations. As a result, managers can substantially reduce project resource costs without compromising quality using a multidimensional resource scheduler. It also helps avoid deploying under-skilled or over-skilled resources in a project.

Maximizes profitable utilization

Project managers can forecast and improve billable and strategic resource utilization. They can ensure that project team members are productive and not spending too much time on administrative activities. Project management resources can periodically be mobilized from non-billable to billable or strategic tasks.

Ensures competent resource allocation

Unlike spreadsheets and homegrown tools that create silos, a resource management solution consolidates all information on a single platform. Using this information, resource managers can allocate the right resources to projects for timely and cost-effective delivery.

Helps make informed decisions

Efficient resource management techniques help you see where your resources are and what they are doing, giving you control of the entire project resource planning process. Real-time business intelligence and reports let you measure the performance of project members. It facilitates accurate forecasting for informed decision-making and helps you to steer projects in the right direction.

Addresses resource constraints effectively

Multiple projects may often require niche-skilled or critical resources simultaneously for specific tasks that can be in a limited quantity in an organization. An efficient resource management process can help prioritize projects and allocate critical resources to high-value projects, followed by others. This way, it helps managers utilize scarce resources efficiently across an organization.

Tracks and improves resource health index

An efficient resource management process helps allocate resources to projects per their skills at the right time and cost. This ensures resources are optimally utilized. Furthermore, regularly monitoring employees’ skills will enable organizations to facilitate L&D programs and career development opportunities that help them learn new skills and stay up to date with current trends. This will enhance employee engagement, productivity, and organizational efficiency.

Futureproofs your business against uncertainties

Resource capacity planning helps you forecast pipeline project resource demands and identify excesses or shortfalls in advance. It also helps assess the requirements to determine the most sought-after skills, technologies, etc. Accordingly, suitable resourcing measures, like training, upskilling, hiring, etc., can be taken to bridge the skill gaps and equip the workforce with the latest in-demand competencies. This will help organizations create a future-ready workforce capable of undertaking multifaceted projects.

Role of resource manager in project management

Resource managers play an essential role in the successful execution of projects. They work closely with project managers, department heads, and other organization leaders to improve resource-related processes. In addition, they are responsible for effectively identifying, scheduling, allocating, tracking, and optimizing resources to ensure the project goals are achieved.

Listed below are some of the critical roles and responsibilities of a resource manager:

Streamline resource planning and allocation

The significant role of a resource manager is to simplify the planning process, which includes forecasting, analyzing, allocating, and utilizing the workforce across the enterprise efficiently. To start the process, first, the project managers assess the resource requirements based on the project scope and raise the requests.

Accordingly, resource managers coordinate with project managers to understand the workforce requirements and the project objectives. Then they analyze the requests and identify competent resources whose skills align with the project demand. Moreover, resource managers must consider other attributes like availability, cost, qualification, experience, etc., while assigning resources to projects.

Forecast pipeline project demand

Resource managers must foresee the pipeline project demand and assess the available capacity to find any existing gap between them. They can take proactive measures if they identify any excess/ shortage of resources. For instance, they can train the existing resources or initiate hiring if there is a shortage.

Conversely, if there is an excess, they can bring future project work ahead, adjust timelines, redeploy extra capacity in other projects, etc. In addition, they can select from the benched resources or coordinate with HR managers to hire a contingent or permanent workforce.

Monitor and track resource utilization

Tracking and monitoring the utilization levels regularly will ensure that the resources work productively on billable and strategic projects. Furthermore, the managers must assess each resource’s workload and ensure uniform distribution to avoid over/ underutilization.

For overutilization, resource managers can bring in more employees and uniformly distribute the work. On the other hand, for underutilization, managers can assign them to some billable or strategic work. This will help prevent burnout and disengagement, increase resource productivity, and help maintain the resources’ health index.

Collaborate with teams and departments

Resource managers must constantly communicate and collaborate with team leads, supervisors, and department heads to gauge and ensure the availability of critical resources to perform the tasks efficiently. At times, the project managers may request resources as and when the client’s requirements change.

Resource managers must fulfill these requests, ensuring the projects happen on time. Moreover, they must coordinate with HR managers to streamline the hiring process or initiate suitable training and upskilling programs to bridge existing skill gaps.

Facilitate effective bench management

Resource managers must regularly track the bench size and strive to minimize it to protect the organization’s revenue. By implementing effective resource management strategies, they can foresee project ramp-downs and find suitable project vacancies to allocate resources before they hit the bench.

Furthermore, they can initiate appropriate measures to prepare the benched resources for future project requirements. Additionally, they can engage inexperienced resources with shadowing opportunities and can provide experienced ones on the bench with appropriate strategic projects to utilize them for profitable work.

Manage resource-related risks

Unexpected events, like unplanned leaves, sudden attrition, etc., can hinder the project’s progress. For instance, an employee working on a critical project has a family emergency and takes leave for some time. In such situations, resource managers must have a backup resource from the existing pool or hire a contingent employee to avoid project delays.

Hence, resource managers must anticipate these risks and formulate a mitigation plan to prevent projects from going off track. They can reshuffle resources from the internal pool or hire contingent workers (full-time or part-time) to manage these resource-related risks.

Knowing the resource manager’s responsibility in managing project resources, let’s understand the significance of project resource management in a dynamic business ecosystem.

Now that we know, the answer to the pertinent question- what is a resource manager, let’s understand the six distinct project resource management processes.

Six project resource management processes as per PMBOK

The Project Management Book of Knowledge (PMBOK) defines Project resource management as a knowledge area that involves managing resources to deliver projects successfully. It includes six project resource management processes, namely:

Plan resource management

Before the onset of a project, it is essential to define the resource requirements. This includes identifying the type and number of resources needed to meet the deliverables. It also determines the approach you will use for project resource management. The resources have different skills and expertise levels, so their job descriptions are created in this phase. This process helps create a resource management plan, team charter, and project document updates.

Estimate activity resources

After the planning, the next step is determining the resources required to carry out various activities in a project. Moreover, other selection criteria, such as qualification, experience, and cost, are defined apart from the type and number. Some primary techniques managers can use to estimate resource requirements are Analogous, Parametric, and Three Point. Besides, evaluating resource requirements helps businesses identify resource bottlenecks and create contingency plans accordingly.

Acquire resources

After estimating the project resource demands, deciding when and how to acquire resources is essential. Managers can leverage internal measures, such as booking similar-skilled benched personnel or pre-booking the ones scheduled for release from ongoing projects. Resource managers can also track the projects reaching the closure/maintenance phase and negotiate with respective project managers to release requisite critical resources. They can also use external resourcing measures, such as hiring a permanent or contingent workforce. For non-human resources like tools and equipment, managers can create a procurement management plan to help ensure their consistent supply.

Develop team

Once you have acquired the resources, you must ensure they are skilled and trained to meet deliverables. It applies to human resources who seek career development opportunities and enrich their work experience. This process helps enhance teams’ overall performance and improves interpersonal skills of resources, productivity, etc. In addition, providing regular feedback on progress, pinpointing areas of improvement, recognizing and rewarding team members’ good work can motivate the team members to perform better.

Manage team

Project teams play a crucial role in the success of projects or organizations. The project team assignments may alter as and when the team members learn different tasks or new skills. Therefore, project managers regularly need to track and measure employee performance, and any issues in the project need to be dealt with appropriately by the team members. The process involves change requests, procurement management plan updates, project document updates, etc.

Control resources

Project scope and client requirements can change anytime during the project lifecycle. Therefore, continuous monitoring and controlling procedures ensure that you have a skilled workforce ready to take up future work. This process ensures that the right resources are assigned to suitable projects at the right time and cost and released when the project ends. Additionally, it helps managers monitor the forecast vs. actual resource utilization and take corrective measures to prevent projects from derailing.

Next, let’s understand the significant challenges in project resource management.

Challenges of resource management in projects

Managing resources can be a daunting task. Planning, allocating, monitoring, and implementing control measures for successful delivery can be highly challenging without the right tools. Furthermore, changes in project scope, client requirements, and demand can snowball and affect resource supply.

Some of the significant challenges of resource management in project management are:

Lack of visibility across the enterprise

A bird’s eye view of resources across the enterprise is a prerequisite for identifying suitable team members. Unfortunately, one of the biggest obstacles to achieving the same is that many project managers still rely on outdated legacy tools.

Wellington’s Annual State of Project Management Report 2020 report states that,

” Only 23% of organizations use resource management solutions. “

Silos of spreadsheets and homegrown solutions fail to identify competent resources within matrix organizations. These tools are susceptible to redundancies and discrepancies, leading to double booking.

The Solution: A resource management system provides a unified view of skills, qualifications, experience, cost, and other critical resource information. It saves you from the trouble of reconciling multiple spreadsheets and helps identify and allocate appropriate resources for the project. One can also leverage cost-effective global resources across matrix boundaries without compromising quality.

Incorrect estimation of team’s capacity and availability

While assigning resources, evaluating the team’s capacity and availability is crucial. When managers have a clear overview of resource availability, they can plan the projects precisely. However, aligning the team’s availability with the project schedule can be challenging without the right tools. There is a close connection between resource availability, capacity, and ability to meet the project deliverables. Let us understand how:

• Evaluate the team’s capacity and availability

Before resource allocation, it is essential to analyze if there are sufficient resources to start the project. For precise project resource planning, managers must have complete visibility of resource schedules to understand who can take up tasks. Unfortunately, many project managers still rely on spreadsheets that fail to update resource calendars in real time. As a result, project managers do not have a unified view of their leaves and time off, resulting in last-minute chaos and discrepancies. This incorrect estimation can cause delays and budget overruns, disappointing the client. So, what could have avoided such instances in the first place?

The Solution: An advanced resource management system provides enterprise visibility of employees’ schedules and their time off, such as vacation, annual leaves, or public holidays. It also provides visibility of other available resources when needed and keeps the project resource plan on track. In addition, resource capacity planning helps to identify and bridge the capacity gap using appropriate measures.

• Unforeseen events

When planning and scheduling project team members, one must consider unexpected circumstances and have a backup plan. For example, your team members can get unwell, have some personal emergency, go on maternity leave, and even abruptly leave the organization. An effective project resource management strategy allows a buffer on resources during unforeseen events.

The Solution: Instead of getting caught off guard, having a plan B when things go wrong helps. Resource capacity planning can help identify resource shortages, and accordingly, you can build an on-demand contingent workforce. These include freelancers and contractors with the required skills to execute the job. One can also look for available resources having the required skills and qualifications.

Incompetent resource allocation

Allocating suitable resources to the right projects is critical for successful project delivery. However, if organizations rely on spreadsheets and home-grown solutions to allocate resources, it creates silos of data and doesn’t provide real-time updates. This becomes challenging for managers to assess which resource is working on what tasks, thereby leading to double-bookings and resulting in sub-optimal allocation of work.

The solution: Robust resource management tools provides unmatched visibility into the enterprise-wide resource pool. With the help of advanced filters and sort-by options, resource managers can select and allocate resources based on their skills, availability, capacity, role, department, location, etc.

Additionally, managers can leverage cost-effective resources from low-cost locations. Moreover, the competency matrix enables managers to update each resource’s skills and competencies in real time with proper verification. This will help achieve competent resource allocation, minimize budget overruns, maintain deliverables quality, and improve profitability.

Unable to optimize utilization without overloading

One of the biggest challenges of project resource management is maximizing billable or strategic utilization without overloading resources on projects. Often, project managers assign more tasks to a selected few employees because they have been counted upon in the past to deliver results.

This overloading can lead to stress, burnout and build animosity among team members. Overloading also causes delays and budget overruns, and other projects also suffer due to essential resources’ unavailability.

The Solution: Project resource management software provides foresight into strategic, billable, and non-billable utilization. Project managers can use flexible heat maps to take remedial measures and mobilize resources from low-priority or non-billable work to high-priority or billable/ strategic work.

Uniformly distributing critical resources across all projects instead of assigning them to a high-priority one controls costs and improves ROI.-priority or billable/ strategic work. Uniformly distributing essential resources across all projects instead of assigning them to a high-priority one controls costs and improves ROI.

Resource limitations in a multi-project environment

In a dynamic business environment, project managers often face resource shortages. The resource supply is affected by sudden changes in project scope, client requirements, or global crises like the current COVID pandemic.

According to PwC project management insights, “30% of project failure results from lack of resources.”

It is incredibly challenging in a multi-project environment, where resource scarcity affects several projects on the boil. For example, there is a niche skill requirement to kickstart a project. Unfortunately, these resources possess highly specialized skills and are not readily available in the market.

The Solution: Project managers can use a multidimensional scheduler to identify a niche resource within the enterprise. Implementing an out-rotation and backfill strategy will help start the new project without disrupting other existing projects.

In addition, What-if analysis allows you to build and simulate various scenarios within the given constraints to arrive at the best outcome. After evaluating every project’s profitability, project managers can prioritize resource allocations.

Disconnect between sales and delivery team

In a project-based business, miscommunication between the sales and delivery teams can spiral down your projects, resulting in low client satisfaction. Once the sales team wins an opportunity, the delivery team takes ownership and is responsible for adhering to the commitment.

However, while achieving the sales targets, the sales team sometimes fails to involve the delivery team before signing the deal. As a result, the delivery team struggles with eleventh-hour resource allocations to meet the deliverables.

The solution: Effective resource management strategy includes forecasting and planning pipeline project requirements in advance. Once the project reaches the opportunity/approval stage, the salespeople involve the delivery team, who evaluates the resource capacity and communicates the deliverables’ feasibility. Accordingly, the sales team negotiates with the client stating the revised delivery commitments, if any, and if both parties agree, the deal is signed.

Scheduling conflicts due to lack of proper resource requisition workflow

Firms that rely on manual resource requisition fail to track resource requests effectively. Instead, resource managers work on the ‘first-come, first-served’ basis and sometimes end up allocating resources to low-value projects, leaving critical projects inadequately staffed.

Further, multiple requests via disparate channels, like emails, calls, messages, etc., causes communication silos between the resource manager and project manager. Consequently, resource managers may allocate the same resource to multiple projects for the same timeline, leading to scheduling conflicts and double bookings.

The Solution: A project resource management solution provides a centralized view of all the ongoing and pipeline projects. It helps resource managers assess and prioritize projects based on predefined criteria, including strategic alignment, ROI, billable value, etc.

Equipped with automated resource requisition workflow, the tool provides an audit trail to track resource requests and any changes made since they were raised. Accordingly, managers can allocate resources to high-priority projects to fulfill their demands first followed by others. It also allows resource managers to change request status to ‘Searching’, ‘On Hold’, ‘Proposed’, etc., to ensure transparency throughout, minimizing scheduling conflicts.

Now that we understand the various challenges let’s learn about the steps to develop a robust project resource plan.

Steps to create an effective project resource plan

The journey starts with creating an efficient project resource plan for every successful project. Then, using resource management solutions, project managers can plan, organize, and manage resources effectively.

Let’s take an example for better understanding. Suppose a bridge construction project will start two months from now. Resources are critical drivers of project success, so the project manager must create an efficient project resource plan. Here are the essential steps to formulate one:

Estimate resources required for the project:

Before starting the project, it is critical to define resource requirements. The project manager identifies the type and quantity of resources. Depending on the resource type, grades or skills can also be determined. For this bridge construction project, they also need to establish cement grade, size of cranes, kind of steel, etc.

Similarly, the skills, roles, experience, etc., are predefined for human resources such as civil engineers, architects, contractors, supervisors, and construction workers. Once the resource estimation is complete, the project manager informs the concerned stakeholders and takes their concurrence. They can then raise resource requests by filling and submitting the resource requisition form on the tool. Although done initially, one must note that resources can be requested in a staggered manner, depending on the project requirement.

Request resources

Once resource estimation is completed, the project manager requests the resource manager for fulfillment. An automated resource-requesting workflow helps streamline the process.

Modern resource management tools allow project managers to specify the required skills, experience, qualifications, cost, and project timelines. This request reaches the inbox of the resource manager in charge, who starts planning for the same. The process is documented and remains auditable, eliminating any process-related confusion or conflicts.

Identify and estimate the shortfall

After receiving the resource request from the project manager, the resource manager starts planning for fulfillment. But first, they need to analyze the existing resource capacity. Next, the resource manager looks into all the resources matching the requirements across the enterprise.

Using appropriate filters such as role, competency, location, and more on the resource management tool, they can quickly find all the relevant resources and their availability. In addition, demand capacity planning helps identify and accurately estimate the excesses or shortfalls.

Hire or retrain resources as needed

After identifying the excesses or shortages, the resource manager can apply appropriate treatments to bridge the capacity gap. Depending upon the project’s duration and nature, stakeholders can decide whether to hire permanent employees or a contingent workforce.

If there is an excess, adjusting project timelines, training/reskilling, or selling excess capacity helps bridge the gap. In addition, employees can be encouraged to acquire more skills. People on the bench and project vacancy reports enable resource managers to identify available employees. Learning new skills with shadowing (on-the-job training) opportunities increases billability if the resources match the minimum qualification criteria.

Publish requirements to empower resources:

Studies have shown that employees are engaged and more productive if they are fully empowered to carry out their responsibilities. Since human resources are essential assets for most organizations, involving them in choosing projects of interest boosts productivity. They are motivated and hence feel responsible for accomplishing their respective tasks.

Resource managers can publish open positions within the resource management system. Every relevant resource matching the role and belonging to the required organization structure, like the team, department, location, etc., is notified. Accordingly, they can revert to the open positions and show interest in joining the project team. The resource manager in charge can take appropriate action in selecting the ideal resource pool.

Seek approval from project/ line managers:

Once the resource manager selects the team members, they seek approval from the project manager before allocation. The project manager can either approve all recommended resources or request changing a few team members. Accordingly, the resource managers start looking for more suitable resources befitting the requirements.

The entire process repeats till both the concerned stakeholders agree on the proposal. The project manager then approves the mutually agreed resources, and the resource manager starts the allocation process. If there is a performance issue with a particular resource, the project manager can roll the person off and ask for a replacement during the project life cycle.

Allocate appropriate resources to tasks

The resource managers’ responsibility ends after the resources are accepted within a project. The project manager assigns various tasks to the selected resources at this stage. They create a complete task list and its dependencies per the work breakdown structure (WBS).

While scheduling team members, the project manager ensures that no one is under or overallocated. As a result, it improves project members’ overall productivity, reduces burnout, and helps meet the project’s objective.

Manage the project delivery

Project resource management is an ongoing process and doesn’t end after the initial resource allocation is complete. Instead, the project manager allows a buffer for potential risks affecting resource availability and completing projects with fewer members. Resource optimization techniques help project managers to complete deliverables with minimal obstruction. They are:

• Resource Leveling: This resource management technique is applied when you face sudden constraints on resources but have the flexibility to extend the project timeline. It applies when a critical resource is unavailable for a particular duration or sharing resources with other projects. Going back to our bridge construction example, suppose a vital resource, the hammerhead crane, needs repair and will be out of order for one week. In that case, resource leveling can help delay the construction activities, dependent on it by a week.

• Resource Smoothing: This technique is used when there is a constraint on the timeline but not on resources’ availability. It means the project deadline and critical path remain unchanged. Depending on the resource capacity and availability, the project manager can add and remove resources to deliver the time-bound project. Referring to the bridge construction example, the project manager can add more construction workers to meet the delivery deadline.

Besides optimizing project resources, the project manager ensures profitability and team productivity. Project managers can use forecasting analytics, and reports inbuilt on resource management solutions to enhance profitable resource utilization. Besides optimizing resources across projects, the project manager ensures profitability and team productivity. Project managers can use forecasting analytics, and reports inbuilt on resource management solutions to enhance profitable resource utilization.n.Apart from optimizing resources across projects, the project manager also ensures profitability and team productivity. Using forecasting analytics and reports inbuilt on resource management solutions, project managers can enhance profitable resource utilization.

Conclusion

To sum up, project resource management is a skill set that every project manager must master, and with the right tools and techniques, it is easily achievable. An effective resource management solution allows efficient planning, scheduling, allocating, and managing resources across projects while maximizing profitability. In a nutshell, it helps meet your project goals using your resources intelligently.

Glossary

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These are the pertinent questions that stakeholders ask themselves on an everyday basis. To get the correct answers, we need efficient resource planning.

Without implementing the proper process and technique, making any decision will be like throwing darts in the air.

Resource planning can address these challenges in today’s dynamic business conditions. It helps plan resources intelligently from the ground up and continuously optimize your workforce. However, taking a shortcut and failing to make a timely decision will adversely affect the organization’s business objective.

This guide is curated for enterprises to gain a detailed understanding of resource planning in project management.

Let’s dive deep into it.

Resource planning definition

Resource planning is the process of identifying, forecasting, and allocating best-fit resources, i.e., human resources, equipment, assets, facilities, and more, to the projects at the right time and cost.

It also ensures the efficient and effective utilization of resources across the organization. In other words, it’s the strategic planning process to make the best use of resources depending on their capacity/availability and deliver every project within time and budget.

Let’s take an example: your firm is an IT company, and you have a software development project in the pipeline received from a global client for a long-term horizon.

Here, project managers will look after the client’s requirements, assess the scope of the project, and will also predict and evaluate the resource demand. As a part of the process, they will request resources from resource managers to fulfill this demand.

The resource managers will now assess the new requirement, find out the gap between the demand and the available workforce, and look for different ways to fill this gap. This will include hiring a new workforce from the market or juggling resources available within the organization. Thus, the ability to forecast requirements and develop a strategy to plan, allocate, schedule, and utilize the resources and their competencies effectively is termed resource planning.

Once you know what resource planning is, let’s understand its importance in project management.

Importance of resource planning in project management

According to a PMI survey, “26% of companies with a dedicated resource planning solution can estimate and allocate resources to deliver projects on time.”

Thus, resource planning is a crucial part of the project management process as it plays a key role in a project’s success.

Here is a list of the benefits and how planning resources makes a difference in the project management landscape:

Allows resource planning for pipeline projects

Creating more projects in the pipeline is desirable, but not having enough resources to execute them causes project bottlenecks, delays in meeting deadlines, and impacts the quality. An intelligent resource plan and timely forecasting help managers predict all pipeline project requirements in advance.

Thereby, resource managers can either allocate a cost-effective global resource or hire an on-demand or permanent workforce with a suitable skill set. This helps reduce last-minute hiring activities, which can lead to cost escalation and compromise quality.

Bridges the capacity gap proactively

Demand forecasting, one of the significant pillars of resource planning, identifies the excess or shortage of resources by comparing the resource demand against the existing capacity. Based on this data, managers can implement the right resourcing treatments to bridge the capacity and demand gap.

CASE I: Excess of resources

When the resource demand decreases vis-a-vis available capacity, it results in excess resources. This excess capacity can be mitigated by bringing future project work ahead, adjusting timelines, redeploying resource capacity in other projects, etc.

CASE II: Shortfall of resources

When the resource demand is higher than the capacity, there is a shortage of resources. It can be resolved by exploring two different resourcing channels.

Internal Channels:

Internal recruitment focuses on the employees already on a firm’s payroll. This includes selecting an employee from the bench based on their skills and qualifications or transferring resources from different projects.

External Channels:

If the required skill is absent in the organization’s internal network, then the resource managers hire the resources from external sources. It includes hiring resources through recommendations/networks and recruiting freelance/contingent workforce from partner vendors.

Minimize project resource costs significantly

According to the Deloitte Global Cost Survey 2020: “Reducing project resource cost takes precedence over other business initiatives.”

Allocating the right resources to the right project ensures the timely delivery of the project within the budget. If resources are underqualified, a delay in project timelines is inevitable, and if overqualified, it can spike project costs. However, with an effective resource planner, managers can make data-driven decisions to eliminate the deployment of over/under-skilled resources on project tasks.

This will enable managers to implement suitable resourcing measures at the right time. For instance, they can allocate a cost-effective global/local resource or a benched resource to a task. Moreover, they will have enough lead time to conduct planned hiring in place of last-minute activities and create the right resource mix that suits the project budget.

Forecast and maximize profitable resource utilization

Resource planning and forecasting provide foresight into utilization within a project. A structured resource plan includes mobilizing resources from non-billable to strategic/billable projects for increased revenue based on their skill set. This prevents under or overutilization of resources and helps improve productivity and employee satisfaction.

Furthermore, an efficient resource scheduler allows managers to view the resource’s present and future allocations on one platform. They can also have a periodic check on forecast vs. actual resource utilization report and accordingly, optimize the utilization levels of the resources.

Ensures competent resource allocation across a matrix organization

Resource planning in project management helps managers gain a centralized view into all resource-related information, such as skill sets, cost rate, location, resource capacity, among others. This visibility and a systematic resource-requesting process help managers leverage the shared service model of a matrix organization. Thus, they can filter and load the appropriate resources to the project/tasks across departments.

Further, it empowers managers to allocate global resources from low-cost locations and control project costs. Moreover, the advanced resource scheduler ensures that strategic resources are not assigned to only high-priority projects but are uniformly distributed across the enterprise. This ascertains competent resource allocation in projects and allows resources to work on different assignments and improve their portfolios.

Delivers project on time and within budget

PwC Project Management Insights states that “30% of projects fail due to a lack of resources.”

The benchmark for successful delivery is meeting project deadlines and avoiding budget overruns. Efficient resource planning ensures that all project resourcing requirements are identified and fulfilled. This also involves periodically reviewing project performance throughout their lifecycle as resource demand fluctuates occasionally.

However, by using forecast vs. actual reports, resource utilization heatmap, etc., managers can monitor and control project budgets. Regular monitoring will ultimately lead to accomplishing the most critical project metrics, such as client satisfaction, higher retention, enhanced work rate, and increased brand loyalty.

Let’s gain insight into the critical elements of resource planning.

Essential components of resource planning template

A robust resource planning software will enable managers to effectively manage resources, mitigate risks, and drive projects to success. Here are some salient features that are foundational to efficient resource planning.

Multi-dimensional resource planner

Identifying the project’s resource requirements is a fundamental aspect of resource planning. This involves analyzing the quantity and type of resources required, i.e., human or non-human. Moreover, it also includes a thorough evaluation of the skills, competencies, and subsequent proficiency levels needed for accomplishing projects and subsequent tasks.

With a multidimensional resource planner, managers have visibility into resource profiles across multipe dimesions such as as team, departments, location, etc. It empowers them to allocate appropriate resources in real time to the projects. In other words, it allows managers assign the best-available-best-fit instead of the first-visible-first-fit resource, enabling competent allocation for all projects.

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Project pipeline planning

Once a pipeline project reaches a certain probability stage, the manager estimates the resource requirements and initiates the requisition process. The corresponding resource manager then begins the fulfillment of the request. But first, they must analyze if the organization possesses adequate internal resources to start the project. Therefore, the resource manager compares the existing resource capacity against the project demand from multiple perspectives such as role, department, team, skills, etc.

This meticulous evaluation helps firms identify the shortages or excesses ahead of time. Accordingly, managers can apply appropriate resourcing strategies such as training/upskilling, out-rotation and backfill strategy, or staggered hiring for niche resources. This approach minimizes wasteful hiring/firing cycles to ensure that the right resources are available for projects at the right time and cost.

Resource utilization forecasting

Resource forecasting techniques enable firms to optimize billable and strategic utilization. It allows mobilizing resources from non-billable to billable or strategic work. Resource planner helps to control project financials by comparing forecasted with actual utilization. It also detects and proactively mitigates under and over-resource utilization.

Further, managers can refer to comprehensive utilization reports, color-coded heatmaps, etc., to identify under/overutilization of resources. Consequently, they can implement resource optimization techniques such as levelling and smoothing to ensure optimal profitable utilization and productivity.

Resource capacity planning

Forward planning resource demand for current and pipeline projects is essential to avoid last-minute scuffles for competent professionals. With robust resource capacity planning, organizations can analyze the enterprise’s resource capacity vs. project demand gap. This foresight helps identify resource excess or shortage and implement corrective steps to bridge the gap.

In the case of a resource shortage, managers can facilitate proactive strategies such as re-training employees or hiring a contingent workforce. Conversely, when there is a resource excess, they can bring forward the project dates. Simultaneously, capacity resource planning helps minimize bench time by adjusting timelines or selling excess capacity at discounted rates and building an optimized project team that is future-ready.

Bench management

With a resource planner, managers can gain early foresight into the workforce that will land on the bench due sudden ramp-down activities. For instance, when a project finishes and the next one begins, managers are prepared well in advance and can proactively allocate these resources to suitable project vacancies on time.

Resource managers can look into project vacancy reports and plan work for resources before they hit the bench. This will reduce bench time between projects for most resources and improve the organization’s bottom line. Additionally, with efficient bench management, managers can provide training or shadowing opportunities to selected employees to enhance their billability.

Reporting using real-time business intelligence

Modern resource planners provide real-time business intelligence reporting and analytics to fast-track decision-making in a rapidly changing business environment. These configurable dashboards and custom reports empower end-users to slice and dice relevant information effortlessly and present insights through visually intuitive graphs and reports.

Moreover, intelligent BI uses a combination of security rights, portal designs, and filters, allowing the end-user to view relevant data and prevent information overload. Additionally, it will enable managers to tailor reports to gain visibility into data matching their specific requirements. This streamlined accessibility empowers managers to make faster decisions and improves the overall resource health index.

What-if analysis for resource simulation

What-if analysis within a resource planner allows firms to build and simulate different resource scenarios in a multi-project environment. This helps managers to compare different scenarios and their potential outcomes. Accordingly, the manager can form different resource mixes, with the revenues earned, to find the most profitable project.

Thus, after deriving the best scenario, managers can apply it to the resource plan. Moreover, what-if analysis also helps prioritize profitable projects based on criteria like budget and timeline. As a result, it enables organizations to manage multiple projects’ demands with limited resources.

Creating an efficient resource plan is essential as it optimizes resource utilization, minimizes wastage, and ensures financial stability throughout the project. Here is a detailed step-by-step breakdown of the same.

How to create an efficient resource plan in 7 steps?

Here are seven distinct steps by which managers can create an efficient project resource plan:

Step 1: Understand client and resource requirements

At the outset, managers kickstart the resource planning process by thoroughly understanding both the project requirements and the resources available within the organization. This includes assessing the project scope, objectives, timelines, and budget.

Based on that, project managers can gauge the resource requirements in terms of skills, types, and number. This initial evaluation helps managers determine whether the existing skills and competency of the workforce align with the overall project goals and take appropriate corrective measures. Therefore, it helps avoid any last-minute firefighting, ensuring successful project delivery.

Step 2: Fulfill the project demand by identifying the gap

After a project manager determines the project requirements, the next step involves requesting the necessary resources from resource managers to fulfill the project demand. Resource managers play a pivotal role in assessing the capacity versus demand gap.

They meticulously analyze shortages or excesses of resources from multiple perspectives, i.e., role, skills, competency, etc. This proactive approach enables organizations to foresee resource challenges, allowing for strategic planning and resource allocation.

Step 3: Implement appropriate resource strategies to bridge the gap

After identifying the shortage and excess of resources, managers must take proactive measures to bridge resource gaps in the short or long term. This visibility into resource gaps allows sufficient lead time for the managers to initiate forward planning and take appropriate resourcing measures to bridge the gap.

For instance, in case of shortages, organizations may facilitate re-training/upskilling resources, juggling project priorities, or hiring a permanent/contingent workforce to avoid last-minute hiring/firing costs. Conversely, when the resources are in excess, managers can either bring forward project dates or sell excess capacity to optimize the utilization of every resource and ensure successful project delivery.

Step 4: Allocate the right resources to the right project

Effective resource allocation is a critical step in the planning process. By leveraging the centralized view and advanced filters, managers can strategically allocate resources based on availability, skills, competencies, and interests. This ensures that managers align the right skilled workforce with appropriate expertise to projects for optimal project success.

Managers can also create the right resource mix of senior/junior employees or contingent/permanent workforce, depending on the project requirements. It will help them control the project budget without compromising the quality of deliverables. This way, the company can consistently complete projects on time and within budget by allocating the most suitable resources.

Step 5: Consider factors that affect resourcing strategies

To effectively carry out the allocation of appropriately skilled resources to the project, managers need to consider the following factors:

• Long-term/short-term assignment

The foremost step to consider while recruiting resources is whether a firm is filling a position for a short-term or long-term assignment. For the short term, hiring a contingent workforce or freelancer is an ideal choice. However, for a long-term assignment, focusing on permanent hiring with lead time is essential. Therefore, considering the project length when hiring helps minimize wasteful hiring/firing cycles.

• Generic vs. niche skill

Generic skilled resources are relatively easy to plan for, as they are readily available within the organization. On the other hand, hiring resources with niche skills may require additional lead time due to their scarcity, which often results in higher costs. Additionally, once their assignment is completed, redeploying them within the organization can prove challenging.

• Cost of the resource

It is important that the resource managers hire the right resources with a defined skill set and experience for the project. They must look into the cost rate of the resource that fits the budget of projects. Furthermore, managers should also factor onsite, offshore, and near-shore options in the recruitment strategy to minimize the overall project resource costs.

• Attrition & succession planning

Managers need to ensure that the sudden resignation of critical resources does not jeopardize a project’s delivery. Therefore, they must implement robust succession plans to identify and train replacements for key positions within the organization. An intelligent resource planner provides a real-time competency matrix that helps managers select competent employees for leadership roles. Therefore, it not only addresses the resourcing needs of the organization but also helps monitor the resource health index.

Step 6: Monitor and control project resources

Once resources have been allocated to project tasks, it’s important to regularly track and monitor the utilization of each professional to prevent instances of under/overutilization. In case of underutilization, managers can bring forth project timelines. On the other hand, managers can implement optimization techniques like resource leveling and smoothing to mitigate overloading.

Further, project managers must anticipate and plan ahead for resource related risks such as unplanned absenteeism, turnover, lower productivity, etc. They must create risk mitigation strategies to control these bottlenecks adequately and prevent them from derailing the project’s progress. This will ensure timely project delivery within the pre-defined budget and quality standards.

Step 7: Conduct a post-project analysis

Upon project completion, it is crucial for managers to conduct a thorough post-project analysis to evaluate the effectiveness of the resource plans and identify areas of achievement and improvement. This will help scrutinize whether resources were allocated efficiently, if project deadlines were met as planned, and if any unexpected circumstances arose.

With these insights, firms can refine and enhance future resource planning efforts by identifying areas of success and potential improvement. They can develop robust and efficient resource plans that align resources with project needs, minimize discrepancies, and ultimately bolster project success rates.

Finally, these are the essential components in a typical resource planning template, which can help effectively plan your workforce. Given below are some of the common mistakes of resource planning in project management. Read on:

Common mistakes of resource planning in project management

The project resource cost can blow out of proportion, and project delivery is significantly impacted without a proper resourcing strategy. This section describes some of the common mistakes made in this area.

Using silos of spreadsheets for resource planning

Despite its limitations, many organizations still use spreadsheets to plan their resources because they are easily accessible. While this software comes at a cost, it offers significant benefits over spreadsheets. Excel resource planner causes improper allocation, double booking, and creates additional work. This system is very limiting and a nightmare to maintain.

Marketwatch states that “88% of spreadsheets are prone to errors.”

Planning resources without overall visibility

Many managers continue to allocate resources without having complete visibility of their skills, competencies, and existing bookings. As a result, it becomes difficult to allocate the right resources to suitable projects at the right time. Restricted visibility also hinders identifying and leveraging quality resources from low-cost locations.

Lack of resource forecasting for pipeline projects

Resource planning for future projects is often taken up at the eleventh hour. The resource managers make the mistake of only taking up the planning activities when the deal is signed. Ideally, it should start after the opportunity reaches a certain probability of closure so there is sufficient lead time to address resource requirements. This results in last-minute activities that create an unbalanced pool as the quality of the resources is compromised.

Not maintaining the right mix of permanent and contingent workforce

Businesses try to fulfill project requirements using full-time employees as it is perceived to be a more cost-effective solution. However, if a niche resource is hired for a shorter duration, it becomes challenging to redeploy him after the assignment is complete. Therefore, a resource plan should maintain a judicious blend of permanent and contingent resources. For short-term assignments, a contingent workforce will be less expensive than hiring full-time resources.

Allocating under or over-skilled resources to the projects

One of the common mistakes of resource planning in project management is assigning under or overqualified resources to tasks. When resources are under-skilled for the job, it causes project delays. On the other hand, over-skilled resources spike project costs. Not assigning tasks per skills and interests leads to decreased employee engagement and loss of productivity.

Unplanned hiring without analyzing project demands

Resource managers often resort to last-minute hiring activities to fulfill project resource requirements. This unplanned hiring compromises quality and leads to a large bench of mismatched skill sets. So, analyzing project demands with matching skill sets is a prerequisite for informed hiring decisions.

Knowing the common mistakes of project resource planning, let’s understand the responsibilities of resource and project managers.

Responsibilities of project managers and resource managers

Project managers operate on a project level with projects of different sizes and complexities. A project manager can manage single or multiple projects and ensure they are completed within a stipulated time and budget. However, resource managers operate at the organizational level and oversee allocating resources to several projects.

The project manager initiates the resource request for an open position within his project, and the resource manager’s job is to fulfill the same. Once a resource is allocated to a project for a particular period, the resource manager’s responsibility ends. However, the project manager’s job only begins to ensure that the resource carries out the delivery responsibilities.

Role of resource manager

In summary, a resource manager is responsible for the following:

• Planning and allocation based on resource skills, previous experience, and availability.
• Conducts capacity planning to address issues of shortfall and excesses of resources.
• Support project managers with the project resource management plan and related activities.
• Address resource concerns by reallocating resources, negotiating, or assigning additional staff.
• Collate new project requirements from the business and provide them to the hiring team.
• Certain limited HR-related functions.
• Collaboration with other departments, e.g., HR, PMO, Sales, Learning & Development.
• Generating reports and analytics for senior management.

Role of a project manager

The corresponding roles of a project manager are:

• Create a project management plan and define the scope and delivery objectives of the project.
• Capture resource requirements and request for fulfillment.
• Streamline communications with stakeholders/ team members and customers.
• Carry out operational reviews as per project KPIs.
• Estimate time and cost and monitor the budget.
• Report the project’s progress, analyze potential risks, and provide a mitigation strategy.
• Document the project and set the expectations for various team members.
• Work with the empaneled vendors for contingent resources.

These are some of the significant responsibilities of resource and project managers. Now, let’s learn about some benefits of resource planning across industries.

How resource planning benefits different industries?

Resources are fundamentally the greatest asset of any organization. It means the profitability of any company is mainly reliant on intelligent resource planning. A key aspect while planning for resources is that it helps to efficiently use workforce potential to get the best possible outcome.

Let us discuss some of the specific industries where efficient resource planning could benefit significantly:

IT industry

Due to the rapid advancement in technology, computing, and automation, IT companies face widened tech skills gaps within their workforce. Technology is changing at a fast pace, and IT professionals are under constant pressure to acquire new skills throughout their professional careers. Timely forecasting and efficient resource planning will help managers predict the demand for niche skill sets well in advance. Then, managers can employ rotation/upskilling methods to gauge these gaps and create an augmented workforce.

Audit and accounting firm

Most of the audit and accounting firms are run by their partners. These firms consider billable utilization a critical KPI to ensure profitability and sustainability. So, depending on the accounting project’s needs, an effective resource planning solution helps to forecast resource requirements (Accountants, auditors, financial analysts, tax consultants, audit interns, etc.) and utilize them for productive activities. It also enables firms to hire interns regularly, give them on-the-job training, and make them billable.

Law firms

Similar to audit and accounting firms, law firms are also run by their partners. Bringing in a client when the firm has inadequate staffing can be detrimental to its reputation and profitability. An effective forecasting and resource planning strategy helps assess future demands and find the right resource (lawyers, legal secretaries, etc.) at the right cost, age demographics, etc. It also enables partners to build an on-demand workforce, create a skill database, and define the total billable hours.

Engineering industry

The increased demand in manufacturing has caused skill shortages in the core engineering industry, where competition is fierce for experienced workers (automobile engineers, machinists, designers, etc.). An engineering resource planning solution helps managers provide reskilling and on-the-job learning opportunities for the employees. Thus, it helps to replenish an aging workforce, fill critical positions, and match them to the best potential projects based on talents and interests.

Construction industry

Construction and infrastructure projects possess highly volatile resource demands due to changing climatic conditions and sudden increases in maintenance activities. With resource planning solutions, managers gain visibility of all construction resources and recruit skilled labor, architects, civil engineers, etc., throughout the projects. Thus, it maximizes the workforce’s productive utilization and ensures minimal resource conflicts. Therefore, efficient resource planning is key to managing construction resources effectively and preventing hiring/firing costs.

Consulting & professional service industry

The professional service industry has a unique challenge to balance resource demands across various clients. With efficient resource planning, managers can keep track of resources and their specialized skills. Since the consultants are deployed at a premium rate, keeping them engaged in client billable activities and reducing idle time for maximum profitability is crucial. At the same time, they need to be provided enough opportunities to acquire new skills and ensure no employee burnout.

Video game industry

The game development industry requires a highly competent team of niche-skilled resources. Efficient resource planning enables managers to diversify their expertise to the maximum potential and fulfill the gaming project resource demand. It also helps to identify in-demand skills and cross-train them to build an optimized workforce of game designers, level artists, programmers, QA teams, etc. Thus, effective resource planning can become a game-changer in fast-tracking the development cycle.

Now that we have learned about the benefits, let’s discuss the best practices for effective resource planning.

Best practices for effective resource planning

Enlisted below are some best practices to consider when engaging in resource planning:

Define clear project goals and objectives

Effective resource planning begins with clearly defining project goals, objectives, and deliverables. This step is crucial as it provides a solid foundation for determining the necessary resources and their allocation across multiple projects.

When the project scope is well-defined, it becomes easier to identify the skills, expertise, and types of resources required to achieve those objectives. In addition, clarity in project goals enables efficient resource planning from the outset, ensuring that resources are aligned with the project’s strategic direction.

Conduct a comprehensive resource assessment

Before scheduling and allocating resources, conducting a thorough assessment is important to determine the specific resource requirements. It involves identifying the types and quantity of resources needed, considering factors such as skills, expertise, availability, and capacity.

After assessing, managers can accurately gauge the resource demand for each project phase. This helps avoid scheduling conflicts such as staff shortages or double bookings, enabling optimal resource allocation and utilization throughout the project lifecycle.

Collaborate with stakeholders

Involving key stakeholders, such as project managers, team members, and department heads, in the resource planning process is crucial. That’s because collaborative discussions with stakeholders help understand project priorities, identify potential resource conflicts, and obtain valuable input.

Additionally, stakeholder involvement ensures that resource planning aligns with project goals and organizational objectives. Organizations can leverage stakeholders’ collective expertise and insights by fostering a collaborative approach, resulting in more informed resource-planning decisions.

Monitor and track resource utilization

Continuous monitoring and tracking of resource utilization throughout the project lifecycle are essential to facilitate effective resource planning. By regularly assessing resource allocation against actual utilization, project managers can identify potential bottlenecks, such as workload imbalances or under/overutilization of resources.

This monitoring process provides valuable insights into resource efficiency and enables timely adjustments. By having real-time visibility into resource utilization, supervisors can optimize resource assignment, ensure even work distribution, and mitigate risks associated with resource constraints.

Foster flexibility and adaptability

Resource planning should incorporate flexibility to accommodate changes that may arise during the different stages of the project. It’s essential to anticipate the need for resource adjustments and establish a process for reshuffling staff when necessary. This flexibility allows for agile resource planning, ensuring that resources can be allocated or reassigned based on evolving project requirements.

By fostering flexibility and adaptability, organizations can respond more effectively to unexpected changes or shifts in project priorities, resulting in improved project execution and better client satisfaction.

Organizations can optimize resource planning efforts and ensure successful project delivery by following these best practices. Now, let’s understand operational and strategic resource planning in project management.

Operational and strategic resource planning in project management

Planning implies thinking in advance about what we need to do to realize the business objectives. Strategic planning aims to attain long-term goals, while operational planning helps achieve the short-term objectives of an organization. Let’s understand in detail:

What is strategic resource planning?

Strategic planning is usually undertaken by top-level management to decide the future direction. It is not limited to projects within a particular department or unit but covers the entire organization. Strategic resource planning looks into the overall long-term resourcing strategy.

It can change drastically based on individual priorities. For example, If an IT firm plans to outsource a temporary requirement, i.e., the resourcing strategy will shift from FTE to contingent staff for IT infrastructure improvements. Similarly, a niche skilled resource’s out-rotation from an existing project to start a new initiative will come under strategic resource planning.

What is operational resource planning?

Operational planning addresses the day-to-day activities of a business. It also supports strategic planning to accomplish the overall organizational goals. First, we decide on the short-term objectives and then determine how to achieve them.

Operational resource planning includes regular business activities and operations as per organizational guidelines. For example, it covers pipeline project management, management of FTE and contingency resources, forecasting billable and total utilization, and more.

Factors that can influence operational and strategic resource planning

Strategic and operational resource planning parameters are linked with an organization’s mission, vision, strategies, goals, and objectives. In addition, the following can influence strategic and operational resource planning decisions.

• Staffing

It defines an organization’s hiring policy for full-time resources and directly influences decisions made on a resource plan. It also covers compensation and benefits, an essential consideration for regular employees.

• Hybrid delivery

The project team is created using a combination of in-house and vendor resources. An in-house workforce performs the critical positions requiring specific domain knowledge. One-time activities such as software development are accomplished using vendor resources.

• Outsourcing vs. in-sourcing

Due to globalization, many businesses outsource certain functions to other organizations. Some organizations also have stricter policies that their confidential data cannot leave the company’s boundary.

• Multi-locational policy

Due to the cost pressure, many projects are being executed from different locations. Therefore, project costs can be minimized using generic resources from a low-cost area. In addition, the high-skilled resources can be located based on their availability, who can take up leadership roles related to delivery.

• Training and development

Full-time resources must learn new skills for their self-development and compete in a dynamically changing environment. Therefore, it may not always be practical to hire new resources. However, a new skill can be acquired by cross-training an existing employee.

• Resource leveling and smoothing

The essential function of resource leveling is to optimize workforce allocation by adjusting the project schedule to resolve conflicts caused by resources’ over-allocation. On the other hand, resource smoothing optimizes distribution by adding new resources without affecting the critical path and timeline. Both of these techniques influence decisions toward a resource plan.

How to address market volatility using operational and strategic resource planning?

Effective resource planning is a critical success factor for an organization’s growth and sustainability. Unfortunately, the outbreak of the COVID-19 virus upset the world’s business model at the beginning of 2020.

Many organizations try to stay afloat in these volatile market conditions with a shrinking budget. Acute cost pressure and skill shortages have also become routine activities. Following strategies can help an organization sustain its profitability while planning for project resources.

Short-term strategy

• Effective capacity planning and identifying the gaps between capacity and demand
• Address the shortage of resources using a combination of FTE and contingent resources
• Either re-train existing employees or go for new hires depending on the requirements
• Identify new projects, adjust the project timelines, and sell services for excess capacity
• Mobilize employees from non-billable or low-priority work to billable or high-priority projects as a routine activity.
• Revisit our rotation/backfill policy for starting new projects with niche skills

Long-term strategy

• Decide non-critical functions that can be outsourced
• Identify at least two to three vendors who can work as strategic partners for outsourcing
• Decide on a multi-locational policy to take advantage of resources from low-cost location
• Adapt a hybrid delivery model for cost efficiency

This is how operational and strategic resource plan helps firms achieve their business goals. Listed below are some of the critical trends of resource planning in project management.

Emerging trends of resource planning in project management

Over the years, the project management landscape has undergone several changes due to technological advancements, management paradigms, etc. Therefore, organizations must embrace newer ways to manage projects successfully to keep pace with these changes. Listed below are some of the emerging trends of resource planning in project management:

Replace silos of spreadsheets with an enterprise resource plan

Silos of spreadsheets and home-grown tools are inadequate for efficient resource planning, adversely impacting business performance. Hence, companies are shifting towards enterprise-level software that centralizes resource-related information and maintains a single source of truth.

Taking resource scheduling to the next level

Today, resource scheduling is not just a simple process of allocating resources against projects. It has evolved into a full-fledged enterprise-level process that ensures maximum efficiency and utilization of resources.

Resource capacity planning for business efficiency

Resource capacity planning is not a luxury for businesses any more. It has become an essential part of the resource planner. It future-proofs your workforce against market volatility by analyzing the demand capacity gap and bridging it proactively.

Resource forecasting to maximize effective utilization

Billable and strategic utilization of the workforce is a crucial indicator of business profitability. Therefore, getting a real-time view of future utilization has become critical while planning for resources. Resource forecasting helps in taking proactive measures to improve future allocations.

Integrating resource management processes with other applications

Traditional resource plans include inefficient and time-consuming processes. Enterprise-level resource planner streamlines them using efficient workflows, alerts, and analytics. It also integrates effortlessly with multiple business applications to maintain a single source of truth across the enterprise.

Monitoring and controlling project resource cost

Enterprise-level resource planner offers various capabilities to monitor and effectively reduce project costs. Some of them are forecasting, capacity planning, resource modeling, pipeline management, bench management, etc.

These are some of the evolving trends of resource planning in project management.

Conclusion

An efficient resource plan fosters you to accomplish more in the same amount of time from the most valuable resources- the people.

Therefore, it is imperative to implement effective resource planning to utilize the workforce to its maximum potential. When resources are planned efficiently, it helps a business to manage risks, reduce delays, optimize resource utilization, etc.

Moreover, implementing the above-mentioned processes with the right resource management software will help you manage your resources intelligently and enhance profitability while maintaining a competitive edge.

Unlock Your Business’s Full Potential Through Strategic Resource Planning Today!

Glossary

SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solution for managing your enterprise resources effectively and efficiently. With over 20 years of experience, this Australian-based MNC has created its global presence across 50 countries and helped more than 100 customers achieve their business goals. SAVIOM also has products for project portfolio management and professional service automation, and that is customizable as per business requirements.t is customizable as per business requirements.

A resource manager needs to consider employees’ skills, qualifications, experience, cost, availability, and specific interests before they are assigned to a project.

Allocating an experienced resource for a generic position can cause lower employee engagement and spike the project resource cost. On the contrary, a junior resource taking up an important role will create employee burnout and affect delivery.

The resource allocation method is an essential component of the project management process. Many successful companies have implemented a comprehensive resource allocation framework with the help of appropriate tools and techniques.

A 2017 PMI study states, “62% of organizations use resource management tools for resource allocation.“

This guide covers the essential aspects and objectives of resource allocation in project management. Before delving deep, let us start with the basics, such as the definition of resource allocation.

What is resource allocation in project management?

Resource allocation in project management is the process of identifying and assigning the best available resources with the right skills to every project for a specific period. It also monitors the resource’s workload throughout the project life cycle and helps reassign them if necessary.

Efficient allocation of resources ensures that the right employees are working on the right project at the right time and costs. It helps reduce costs, improve productivity and ensure the successful completion of projects within the stipulated time and budget.

It involved balancing competing requirements and priorities and determining the best plan of action to maximize the utilization of limited resources and improve ROI and profitability.

Knowing the definition and role of resource allocation in project management, let’s understand the key factors affecting the resource allocation process.

Key factors affecting resource allocation in project management

Certain aspects must be considered while assigning the right resources to suitable work and tasks. These elements can vary based on the project and its specifications. Listed below are some of the critical ones:

Project goals and objectives

The overall project goals and objectives play a significant role in determining how resources should be allocated. Assigning the resources must be aligned with the project’s desired outcomes and strategic priorities. Determining the projects’ goals and objectives helps align the resource allocation with the project’s strategic objectives, ensuring that the most critical tasks receive adequate resources.

Furthermore, project goals and objectives enable organizations to identify the types and quantities of resources required to accomplish the tasks. In addition, managers can evaluate the specific skills, expertise, equipment, materials, and budgetary needs necessary for the project’s success. Clear goals allow project managers to estimate the resource requirements and allocate resources accordingly and accurately.

Changes in project scope

Another critical factor influencing resource allocation is the changes in project scope. Scope changes lead to adjustments in project tasks, activities, and deliverables. Therefore, the number of employees required to work will also vary based on the changes. Hence, resource allocation decisions should consider the specific requirements for achieving project success.

Furthermore, changes in the project scope impact the availability of resources. For instance, if the project scope expands and requires new skills and expertise, more resources must be allocated. Contrarily, if the scope is reduced, the resources assigned to various tasks may become available for reallocation to other projects. Hence, project managers must consider resource availability and adjust allocations based on the scope to maintain a balanced resource pool.

Project dependencies

Often, the project tasks are interdependent, and the completion of one task will lead to the start of another. Hence, managers must appropriately allocate resources based on the dependencies to tasks and their availability, ensuring on-time project completion.

Furthermore, when multiple projects or tasks have the exact requirement for a specific resource, the allocation decisions must consider the availability and capacity of that resource. Managers must ensure the particular workforce is assigned in a way that fulfills the requirements without being overloaded or causing conflicts in resource availability.

Task or project prioritization

Managers must assess the criticality of the tasks or deliverables. Some projects may be of higher priority and require resources on an urgent basis. In such situations, managers must allocate resources based on the project or task priorities. This ensures that limited resources are assigned to critical tasks, maximizing project success.

Prioritizing projects and tasks enables firms to effectively manage time by identifying and allocating resources to time-sensitive tasks or projects. Resources can be assigned to critical tasks with deadlines, preventing delays and ensuring timely completion.

Resource availability and skills

The resources availability and skill sets are essential while allocating them. Resource attributes like expertise, experience, workload capacity, etc., must be considered to ensure the right resources are assigned to the appropriate tasks. This ensures successful task completion and enhances overall project performance.

Managers must assess the availability of resources that play an essential role in resource allocation. The allocation must be adjusted if a resource is unavailable during a specific period. Resource availability impacts the scheduling and sequencing of tasks and activities.

Meeting the project deadlines

Organizations need to keep up with the project timelines to maintain their profitability. Efficient resource allocation is crucial to meet project milestones and ensure timely delivery. Proper resource allocation ensures that the project progresses as per the plan, minimizing the risk of schedule delays.

Project deadlines influence resource availability and allocation. Resources must be allocated to align with the project schedule, ensuring they are available when needed. Resources allocated appropriately prevent bottlenecks and workforce shortages, enabling efficient task execution and on-time project delivery.

Risk assessment

Project risk assessment can influence resource allocation decisions. By assessing risks, managers can determine each risk’s likelihood and potential impact on the project’s objectives. Allocating resources to address potential risks helps ensure project success and reduce adverse effects.

By assessing the potential risks, managers can have a backup plan for resources from the existing pool or contingency resources to address these unforeseen risks arising from unexpected events. For instance, in case of prolonged absence of a resource or unplanned attrition, a contingent workforce can be quickly replaced to ensure the projects are delivered on time.

Now that you’ve understood the factors affecting the resource allocation framework, let’s dive deep into some examples.

Examples of resource allocation in project management

An efficient resource allocation strategy allows the effective distribution of the available resources to several projects. However, this activity also requires regular updates to achieve the future goal of the organization.

A project manager often needs to carry out delivery responsibilities with fewer resources. So, how does project resource allocation under these circumstances happen? Does one identify each resource’s primary skill set and assign them to open positions, or is there a better way?

Let’s look at some of the specific resource allocation examples in a project:

• Let us take an example of resource allocation in an IT project. Architect positions are critical for delivery. They are expensive and less in numbers. They need to be involved at the beginning of the project for system design-related work. In this case, can I afford to dedicate an architect to a specific project, or do they need to work on multiple projects?
• The second example could be when a project manager tries to deliver several projects with fewer resources. Should I put some low-priority projects on hold or extend their timeline due to a resource crunch? Shall I allocate my existing resources only to high-priority projects?
• In another resource allocation example, let us assume that one has the required capacity and enough work. But, there is a mismatch in the skill set among the available resources. So, how do I effectively utilize the existing resources by building secondary skills? Can I risk allocating a resource that matches approximately 60% of the job description?
• There are many projects. But, the tasks do not require full-time involvement of the resources. In this situation, how do I ensure I do not over/under-allocate human resources?

These are all pertinent questions and do not have any standard answers. The decision on resource allocation in a matrix organization depends on its current situation and immediate priorities. At times, resources may need to be out rotated from a low-priority project with suitable backfill depending on business priority. These are examples of resource allocation problems in a dynamic business environment.

These are some of the resource allocation examples. Now, let’s learn about some of the problems of the resource allocation process.

What are common problems of resource allocation in project management?

Although resource managers initially conduct the allocation process, continuous change in project demands makes it daunting. Let us analyze some of the common resource allocation problems.

Use of legacy tools or spreadsheets

Many organizations still use homegrown half-baked solutions like spreadsheets for the project resource allocation process because it is readily available. Unfortunately, these legacy tools fail to provide accurate real-time data for resource allocation, leading to discrepancies and double bookings. In addition, spreadsheets are incredibly time-consuming, limiting, and a nightmare to maintain.

According to MarketWatch, “88% of spreadsheets have errors.”

Frequent changes in project scope

In an agile world, the project scope can change anytime during its lifecycle. Changes in project requirements can lead to fluctuating resource demands. So, frequent allocations to meet the dynamic demands become challenging without an updated resource schedule. The sudden closure of a large project will also increase the bench size, which can affect the bottom line.

Unable to predict resource availability

While allocating resources to a project, resource managers typically look at the existing workforce pool. Additionally, they need a backup contingency resource allocation plan rather than relying entirely on a specific person. For example, some team members can suddenly fall sick, or getting time out of a shared resource may be challenging because of other commitments. Since resource availability can suddenly change, it can be a roadblock in project resource allocation.

Project uncertainties causing delays

Even after meticulously ticking all the checkboxes, such as project scope and constraints, uncertainties can crop up anytime during the project lifecycle. There could be a delay in the project start date, and you may need to block specific resources without billing. Project managers must promptly respond to these uncertainties, e.g., dynamic resource allocation, including juggling resources within projects or reassigning them.

Limited resources in a multi-project environment

Some organizations run multiple projects simultaneously, sharing limited resources to complete the delivery. Negotiating with other project managers over the same resources could lead to a change in project priorities for one of them. However, it also means that one of the other projects gets stalled and eventually delayed.

Lack of knowledge and communication

Sometimes, project managers lack business knowledge. Due to communication gaps among the team members, they cannot estimate the resource requirements on time. With the incorrect resource demand, the project lands up with either an excess or shortfall of resources. It gets noticed during the execution, and the project can get adversely impacted. Excess resources will blow up the project cost, whereas fewer resources can cause delivery delays.

Location and time zone differences

Due to globalization, many organizations have implemented an onsite/offshore/nearshore strategy to control costs. Resources are allocated in different geographies covering different time zones for the same project. As a result, there is a lack of coordination between the key members, which can cause project delays. Limited overlapping business hours between the two countries can only provide a small window for essential meetings and knowledge sharing.

Since you are clear about the various resource allocation problems, let’s see how beneficial it is in project management.

Importance of resource allocation in project management

The unavailability of a critical resource can cause project delays and adversely affect overall task dependencies.

According to PMI, “50% of projects fail to deliver on time, out of which 23% cite poor resource allocation as the primary cause.”

A systematic resource allocation process ensures that resources are available when required. Let’s look at some benefits of resource allocation in project management.

Minimizes project resource cost significantly

Resource allocation tool helps you to identify and allocate the best-fit resource instead of first-visible resources. It enables you to deploy cost-effective global resources across matrix boundaries, reducing project resource costs significantly. Resource allocation in project management maintains profitability by uniformly distributing resources across all projects instead of assigning them to a high-priority one.

Deloitte Global Cost Survey reveals “Cost reduction scores over other business initiatives.”

Maximizes profitable resource utilization

Simply allocating resources to projects does not ensure profitability. They could be working on non-billable or mundane operational tasks. Businesses must ensure optimum resource utilization, and resource allocation helps achieve that and more. Resource managers can take corrective measures to avoid under or overallocation of resources in advance using real-time information and forecasting methods. Mobilizing resources from non-billable work and allocating them to strategic/billable work ensures profitability.

This article helps you understand the limitations of legacy systems and how a modern resource management solution will assist your business

Enables finding the right resource using centralized visibility

A resource allocation system captures resource-related information in real-time and consolidates it on a centralized platform. 360-degree visibility helps allocate resources to projects based on qualifications, skills, experience, availability, costs, and other selection criteria. Centralized visibility and real-time updates avoid data redundancy and discrepancies that could lead to double-booking chaos. It is one of the significant benefits of resource allocation.

Delivers projects on time and within budget

Delivering projects on time and within budget ensures project success, increases client satisfaction, and maintains your organization’s reputation. In addition, if resources are allocated efficiently, it can eliminate the under or over-skilled project resources. Under-skilled resources cause project delays, whereas overqualified team members can spike project resource costs. Therefore, resource allocation is critical to project management.

Diversifies employee skill sets for increased billability

Encouraging employees to possess multiple skills enhances their billability. Allocating resources to different projects allows them to build secondary skills in addition to sharpening their primary skills. Focused training programs and on-the- job-experience further help them to improve their capabilities. Secondary skills are handy to make them billable if they are not deployable using primary skills.

Solves resource constraints with smart allocation techniques

In a multi-project environment, intelligent allocation of resources involves generating more ROI using the existing pool. What-if analysis allows you to build different scenarios and simulate each using the resource constraints. After comparing and analyzing each scenario, resource managers can help arrive at the best possible outcome. It can then be applied to the project allocation schedule.

Improves employee engagement and productivity

One of the resource allocation best practices involves assigning resources to project tasks based on their skills and interests. Providing an environment for self-development, skill-building, and staying abreast with current technology trends motivates them. Resource managers can effectively manage the bench and improve overall billability by giving them the right opportunities. The employees also feel more responsible and take ownership of their jobs, which increases engagement and productivity.

These are some of the significant benefits of resource allocation in project management. Let’s know some telltale signs that help organizations improve the resource allocation process.

4 signs you need to streamline your resource allocation

Improper resource allocation will put projects at a higher risk of encountering missed deadlines, lower productivity, increased costs, etc. Below are some essential signs of poor allocation in an organization:

Unavailability of critical resources

Frequent unavailability of critical resources indicates poor resource allocation that can disrupt projects. It can occur due to booking many critical resources to a project, leaving the other projects with fewer niche-skilled resources. Further, critical resources are highly demanded and often moved between different projects to fulfill ad-hoc demands. Therefore, project managers may sometimes be unwilling to release them to keep them readily available for future similar work, causing a lack of critical resources in a multi-project environment. All these scenarios indicate the need to make resource allocation transparent and all-encompassing.

Non-uniform workload distribution

If certain resources are overwhelmed with too many projects/ tasks while others are underutilized, it implies uneven workload distribution, indicating inefficient resource allocation. When employees are booked to projects exceeding their capacity, it will cause stress and burnout. Likewise, when resources are scheduled to project/ tasks below their capacity, it will lower their morale and lead to disengagement. This uneven workload distribution will eventually lead to poor project outcomes.

Lowered performance and productivity

When there is a dip in the performance and productivity of employees, it is a sign of poor resource allocation in organizations. When a critical resource is deployed to low-priority or mundane tasks, they will feel undervalued and disengaged. Conversely, when an under-skilled employee is assigned to high-priority projects, it will cause stress, exhaustion, and burnout. Both situations will eventually hamper the project’s progress and the final deliverable quality.

Frequent project failures and client dissatisfaction

“According to Wellington report, only 34% of organizations complete projects on time and within the budget.”

Project failure is an indication of improper resource allocation. It can stem from deploying under/over-skilled employees to projects, setting unrealistic deadlines, resource under/overutilization, etc., causing budget and schedule overruns, productivity issues, and project failures. When projects fail, clients may also feel that the organization has not delivered as committed, resulting in dissatisfaction and loss of repeat business.

These are some essential signs that will help organizations improve resource allocations. To overcome these issues, let’s understand the best resource allocation methods in project management.

What are the resource allocation methods in project management?

Resources can be either fully or partially available. Resource managers need to consider this while making allocation decisions that ensure optimum utilization.
So, how do you allocate human resources in a complex project environment? This section describes the essential resource allocation steps in project management.

Create a project plan using an appropriate tool

It is necessary to divide each project into several tasks and create their dependencies. This process is known as the work breakdown structure (WBS), the minimum requirement in starting a project plan. Two tasks can be executed sequentially or in parallel based on their relationship.

The critical path within a project plan determines the minimum time required to complete the project. This information can be used within a project management tool to provide a Gantt chart view. Resource allocation is integral to this process because resources are assigned to each task for completion.

Identify resource requirements for project tasks

Once the project is successfully divided into tasks, the resources available can be assigned as appropriate. The task may require human and non-human resources, depending on the nature of the work. For human resources, it is necessary to identify skills and competencies. For a non-human resource such as machinery, determine the equipment specifications before allocating a task.

PwC Project Management Insights states, “30% of project failure results from lack of resources.”

Find available resources with matching skill set

Using resource allocation software, one can quickly identify the availability of a resource within the pool for matching skills. Searching for equipment with matching specifications can also be used for a specific duration. In addition, the allocation tool provides a mechanism to update each resource’s skills and competencies in real time with proper verification.

Bridge the demand-capacity gap using multiple channels

One can hire or use contingency resources if a human resource with matching requirements does not exist. Similarly, if the equipment is unavailable, it can be taken on lease or procured, depending on the resourcing strategy. All relevant costs need to be factored into project financials. The resource allocation process begins once the resources are selected for a specific project.

Allocate resources as per demand

Once the project resources are identified and established, they are assigned to specific tasks. Sometimes, the resources may not be available when needed to perform the task. If you opt for a new hire for a specific task, the person may decide not to join at the last moment.

It may be necessary to have a backup plan for this resource. For critical positions, the person could be asked to join a little early to be available when work starts.

Re-allocate resources between projects if required

Re-allocation of resources is necessary during the project life cycle for various reasons. For example, a resource may have performance issues that may need replacement. A resource with niche skills may be required in another high-priority project.
So, one needs to out-rotate the person with a suitable backfill so the current project does not suffer. Some of the positions can fall vacant due to attrition and need replacing. The project manager also can rotate resources within the same project with different roles.

Track and monitor resource usage

It is necessary to track the performance of each resource to implement an effective resource allocation process. In an ideal situation, there must not be under/ overallocation of resources or over/underutilization of the workforce.

However, it is tough to ensure this for every resource when you have a large pool to manage. The experience of the project manager and some amount of subjectivity play a significant role in deciding this. The dashboards and reports from resource allocation software can help in decision-making.

Now that the strategies are clear, we move on to know how to combat the runtime resource allocation challenges.

How to solve runtime resource allocation challenges?

Most of the allocation of resources related to activities occurs during a project’s initiation phase. The projects can be short-term or long-term, and resource demand can vary. The project may require additional resources, or some existing resources may need to be rolled out. But what happens if the initial resource allocation goes wrong as you have onboarded incompatible resources quickly?

It can create a significant stumbling block in the delivery and must be course-corrected ASAP. We refer to this situation as a runtime resource allocation challenge. Following resource optimization techniques can mitigate some of these challenges as a part of a new resource allocation strategy.

Resource leveling

In this case, the start and finish dates of the projects are adjusted based on resource constraints. One can adjust the project timeline, but it isn’t easy to get additional resources. For example, research projects may have this kind of flexibility. The manager must rework and create a revised schedule to identify the new completion date using available resources.

Resource smoothing

There is no flexibility around the project timeline in resource smoothing, and the work must be completed within a specific time. However, the project manager can add and remove resources during the lifecycle as required to deliver the time-bound project. Resource availability is assumed.

Additional mentoring using SME

If the existing resources do not meet the 100% requirement, they can be given additional learning opportunities on the job. Positions requiring multiple skills are challenging to fulfill.

A person meeting a certain percentage of the requirement can be given a chance with additional mentoring. It is provided by identified subject matter experts (SMEs) to fast-track his competencies. The SMEs could be either external persons or someone within the project.

Independent audit

An independent audit can be carried out if there are governance issues that have resulted in an improper allocation of resources. Experienced project managers usually do this within the organization or with the help of consulting firms. The person concerned needs to engage with the client and the internal team to get the project back on track.

If the resource allocation strategy is flawed at the beginning of the project, it can derail the overall delivery objective. Moreover, it is expensive to revisit the allocation of resources when the project is in execution mode. Every project manager would like to avoid such a situation. But unfortunately, this can happen due to many factors beyond their control.

These are some of the best ways to solve runtime resource allocation challenges. Let’s delve into how ideal resource management can benefit resource allocation.

How can resource management software help streamline resource allocation?

An enterprise-grade resource management system provides advanced features and functionalities that help organizations allocate resources and achieve sustainability and profitability effectively.

Here’s how-

The tool’s 360-degree visibility enables managers to allocate resources efficiently based on their skills, qualifications, availability, experience, etc. Additionally, it helps assign cost-effective global resources to projects to maintain the quality of deliverables and profitability.

Furthermore, forecasting and capacity planning enables managers to forecast pipeline project demand. The capacity vs. demand reports help identify shortage/ excess of resources and allow managers to take appropriate measures to bridge the gap. This will ensure a 100% fill rate for projects to happen on time.

Additionally, real-time BI reports and dashboards like utilization heatmaps and forecast vs. actual time/cost reports enable managers to prevent overallocation and underutilization, ensuring uniform workload distribution. Furthermore, managers can effectively mobilize resources from non-billable to billable or strategic work to ensure they are optimally utilized.

Moreover, the system’s open seat feature allows managers to create and publish positions across the firm. Accordingly, interested candidates can apply for the work, and managers can select the appropriate ones, saving time to identify the right resource and enable effective allocation.

Lastly, the tool’s what-if-analysis feature helps managers create various resource plans, compare their outcomes, and implement the most viable one on the actual schedule, facilitating successful allocation.

Thus, modern resource management software with advanced capabilities can help in effective resource allocation in an organization.

Summary of resource planning and allocation

In conclusion, we describe some of the resource allocation best practices:

Do’s

• Know the scope of your projects before carrying out resource planning and allocation. Is it a big or small project, long or short?
• Use proper resource planning and allocation tools to get a 360-degree view of all resources. It includes their skill, availability, booking details, etc.
• Establish a well-documented resource-requesting process
• Get visibility of your pipeline projects in advance. Plan allocation with ghost resources that can be replaced by existing resources later.
• Build a strategy for contingent resources and freelancers in addition to full-time resources. Establish a few vendor organizations that can provide resources quickly. In addition, they can be utilized for short-term assignments.
• Encourage employees to acquire multiple secondary skills in addition to their primary skills. It will help to place them in a billable role.
• Encourage project managers to accept a certain number of resources matching 60-70% of actual requirements. The remaining skills can be acquired on the job.
• Plan for runtime resource allocation for some of the high-priority projects.
• Track your resource scheduling in project management details using allocation reports. Then, plan for the resources getting rolled off from the project on specific dates.
• Have an overall risk and mitigation strategy on resource allocation for individual skill sets with particular emphasis on niche skills

Don’ts

• Do not over or under-allocate resources. Burn rates will ultimately result in unplanned attrition.
• Balance the resource allocation activities across the organization. Do not give priority to certain projects at the cost of others.
• Do not allocate contingency resources for long-term or strategic projects. These positions need to be filled with regular full-time employees.
• Avoid hiring regular employees if you have short-term requirements and do not have visibility for future work. The contingent workforce can do this; otherwise, this will result in a higher bench.
• Reduce the hiring/firing cycle for the resources. It will give a bad reputation to the organization. However, it can be controlled using effective resource capacity planning.
• Do not assign critical or expensive resources to non-billable activities. This will be a waste of their skill set. Instead, junior resources or trainees can pick up non-billable tasks.
• All the high performers should not be allocated to a single project. Each project must have a combination of high achievers, some average, junior resources, and contingency staff. It will help to create a proper band mix and increase profitability.

Glossary

The SAVIOM solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries and has helped more than 100 customers address their business needs. SAVIOM also provides smart solutions for project portfolio management, professional service automation, and workforce planning software.

Please contact us to discuss your business challenges and significantly reduce project resource costs!